Welcome to AppFolio's Investor Day 2023. It's great to have all you here in San Francisco in person, and welcome to everyone who is streaming with us today. I'm Lori Barker. I'm a Managing Director of the Blueshirt, and I facilitate investor relations at AppFolio, and I'll be your host today. Today, we'll begin with Shane Trigg kicking us off with AppFolio's vision and strategy. Shane, as you know, is our President and CEO. Will Moxley, our Senior Vice President of Product, will then talk about differentiating to win. There will be a break with product demos, including some of the AppFolio Realm that you've heard about, the AI-powered capabilities, and that will be next door in the Pacific Heights room. After that break, Lisa Horner, our Senior VP of Marketing, will come on and talk to you about elevating our customers. She'll be hosting the AppFolio customer panel. We'll conclude with a financial overview by Fay Sien Goon, our CFO. For today's meeting, we'd like to ask you to save your questions for the Q&A portion of our program. At that time, we will take questions both in person and from the web. We'll conclude our program after a Q&A around noon, and then we'll say goodbye to our streaming participants, and in-person participants can join us in the foyer for a nice lunch. This presentation contains forward-looking statements that are based on management's beliefs and assumptions, which are formed from currently available information. Forward-looking statements include any statement that refers to possible or assumed strategy, trend analysis, future product developments, future market conditions and size, and other characterizations of future events. We assume no obligation to update any such forward-looking statements. For greater detail about risks and uncertainties, please see our filings with the SEC, including our Form 10-K for the year ended December 31, 2022, and the most recent quarterly report on Form 10-Q, which you can find on our investor relations website. This presentation also includes a discussion of non-GAAP operating margin and free cash flow. A description and reconciliation of these non-GAAP financial measures to AppFolio's financial results, as determined in accordance with GAAP, are included in the appendix to this presentation. Now let me welcome to the stage Shane Trigg. Thank you, Lori. All right. Well, welcome, everyone. Good morning. It's great to see everyone in person. We'd also like to welcome all of our streaming attendees who are online. You know, this is my first Investor Day as CEO of AppFolio, and it's an honor and privilege to be here with you today. On behalf of our entire team, we are excited to refresh and reaffirm our vision and strategy for the company. I think you'll find we're very much the same company you've gotten to know over the years, and we are much more focused and disciplined than we've ever been. Today, we will tell the story of AppFolio. We'll give you some insights into our business, share our strategy, and talk about how we are creating exceptional value for our customers. You will also get to hear from some of those customers with a customer panel today, and, find out all the things that we're doing and how we're thinking about the future. We deeply believe in the direction of our company, and we have a lot to talk about. So let's get started. Now, I mentioned we're very much the same company, that you've gotten to know over the years, and this is really evident through our consistent revenue growth. We just finished our third quarter of 2023, delivering 32% year-over-year revenue growth, and have guided to $610 million for the year, which results in 29% revenue growth for 2023. We are able to do this through our long-term investments, our intense customer focus, and our passion to deliver industry-leading innovation to solve our customer problems—customers' problems in new ways and make their lives easier and more productive. And of course... Bless you. And of course, we have a very dedicated team of people that want to invest in our people and build a thriving culture. We are a business that is not constrained by opportunity, which contributes to our consistent revenue growth. Now, how do we take advantage of these opportunities? The levers of our success are actually pretty simple and can be broken down into repeatable steps. At every stage, we land, we expand, we grow, we extend the value to our customers, and then we retain them, increasing the value we deliver to our customers over time. When we talk about landing customers, this is new customer acquisition. A new customer comes onto our platform, and then we think about expanding them. This is where they expand units of their portfolio onto our platform. Today, we have nearly 20,000 customers and almost 8 million units on our platform. Then, when we think about growing our customers, there are residents attached to every unit that comes on our platform, where we provide value-added services, particularly around payments, screening, and insurance, and the adoption of these services increases our average revenue per unit or what we call ARPU. Value-added services are just one way that we grow our revenue with our customer base. We also provide an upgrade path with AppFolio Property Manager Plus and our recent launch of the new Max tier. When we think about extending the value of our platform, this is really through AppFolio Stack. As we become a more open platform, we can take advantage of all the innovation that's happening in the PropTech ecosystem and deliver and extend that value to our customers. We've recently announced having solution partners so we can get them the help they need and when they need it to really achieve and receive that value. We talk about retaining our customers at a very high rate, and we do this through our product innovation, our ease of use, delivering exceptional service, and delivering an exceptional customer experience. Ultimately, we grow when our customers grow, and we're very focused on building long-term relationships with our customers. Our mindset internally is we are only winning when our customers are winning. Now, we know this is a successful approach because we've been doing this for a while. It's hard to believe, but AppFolio is 17 years old, having been founded in 2006. In 2009, we launched our first value-added services, is actually websites, and we quickly followed that with payments, screening, and insurance, and we continue to launch value-added services to meet the needs of our growing customer base and deliver value. In 2015, AppFolio went public, and in 2018, we launched AppFolio Property Manager Plus, and we did that to meet larger, more complex portfolios, and this was really our first move upmarket. Now in 2023, we are healthier than we've ever been. We are delivering more innovation than we ever have with our AI capabilities like Realm and Realm-X, and our new Max tier that includes Leasing CRM and Leasing Signals that we announced at our customer conference just this year, and is meant to support our upmarket customers. This gives our customers three tiers to choose from, with Core, AppFolio Property Manager Plus, and the Max tier to meet the size, scale, and complexity of all customers, providing a clear upgrade path so when they grow, we grow with them. Like I said earlier, we have nearly 20,000 customers, and it continues to grow, and we are positioned to power the real estate industry. Now, we continue to be guided by our values, and they're deeply embedded in our team and our culture. Our values have been in place since the beginning, and they are the foundation of who we are and how we think about facing the challenges ahead. Our values are material to our culture, they're material to our brand, and this is because we know that engaged employees deliver the best service and the best customer experience. Our values are truly reflective of who we are, and these have been proven to be particularly important when making very difficult decisions and doing hard things like we've had to do this year. You can also see that listening to customers is in our DNA, and if there's any value that we focus on consistently all the time, it's that. We do this each and every single day, and that lends itself to the innovation we deliver for our customers. Our values are foundational to our success, and we will always, always be a value-driven company. Now, I said earlier that we're very much the same company that you've gotten to know over the years, and we're more focused and disciplined than we've ever been. And that's because we continue to pull full through this strong foundation and rich history of the success that we've created at AppFolio while making changes in service of our shareholders and our strategy. And you can see those changes in our results, where we have consistent top-line revenue growth while becoming a much, much healthier company. We are delivering significantly better Q3 earnings, where we delivered non-GAAP operating margin of 16% and non-GAAP free cash flow of 20%. Now, these are some changes in direction that you've seen, and being here with you today, I think it's important that we share what we've been doing and ultimately why we've been doing it. So though I was new to the CEO role this year, I've actually been with employees a bit, confused our customers a bit, and confused our investors on who we are and what we're actually trying to achieve, what's really important to us. In coming into the seat, I felt to reach our potential and be the company our shareholders expect us to be, we need to keep it simple, clear, and disciplined. You know, we've always been focused on real estate, but our mission was a multivertical mission. We are now focused on real estate. By declaring one vertical focus, we then integrated the company and came together as one AppFolio to align our structure with our strategy, moving from a business unit model to a functional ensemble. In that process, we went from multiple leadership teams down to one, not only giving us operating leverage, but also helping drive our focus. In addition, we begin aligning the value we deliver with the value that we receive, and we reduce spans and layers to become a flatter, more nimble organization that is closer to our customers so we can move quickly and ultimately deliver for them. Make no mistake, we've had to make some difficult decisions this year, and doing hard things is something that has made us much more resilient, and we are a stronger, healthier company because of it. Now, speaking of that one leadership team, this is the AppFolio leadership team. We are very diverse in our AppFolio tenure. We're very diverse in our SaaS experience, and we're very diverse in our experience in the real estate industry. Today, you'll hear from some of those leaders. You'll hear from our Senior Vice President of Product, Will Moxley, who's in the back. Will, give us a wave. There he is. You'll hear from our Chief Financial Officer, Fay Sien Goon, who's back there. Fay Sien, give us a wave. And you'll also hear from our Senior Vice President of Marketing, Lisa Horner. Lisa, give us a wave. And she's gonna lead our customer panel later today when you hear from our customers. Our team is very aligned in what we believe, and I wanna take a moment to let you all know what you can expect from this leadership team. Our leadership principles are simple, clear, and disciplined, as I talked about earlier. We believe in happy and growing customers. We believe in delivering industry-leading innovation. We believe in delivering exceptional service to our customers. We believe in growth and profitability, and we believe in investing in our people and building a thriving culture. These principles reflect how we think, how we act, and how we invest. We also believe over the long term, this is what best serves our customers, our employees, and our investors. With that, we have a new vision for the company, and this refreshed vision for our company is, you know, giving us leverage to our experience, our expertise, and the networks of customers, so we can drive profitable growth in the long term. Our vision is to power the future of the real estate industry, and with that vision, our mission is to create that future. That mission is to build the platform where real estate comes to do business. Now, let's talk about what that really means and what the opportunity we have ahead of us when we go do that. Today, our platform powers all of our customers in every unit on AppFolio. We have a scalable infrastructure. Our platform is a system of record, a system of engagement. It's a system of intelligence, and through our stack ecosystem, we can extend the value of our-- to our customers through the innovation happening in the PropTech ecosystem. With Realm, our generative AI and LLM capabilities, we provide workflow orchestration engine to automate our customers' businesses. This is where customers can literally ask, tell, and teach the product to do something for them. We can horizontally apply common services across through services like payments and insurance. Our platform also powers industry segments. Industry segments are the target audience of how we define real estate at AppFolio. For AppFolio, real estate is really about investors, owners, property managers, vendors, and residents. Each industry has a market segment, where a depth of value-added products and services can be explored in the expand stage of our land and expand strategy. Today, the majority of our success is through the property management industry segment, where we focus on the market segment of single-family, multifamily, affordable, student housing, and community associations and commercial. We also focus on investor. In the investor world, we have an award-winning product. It is a small, emerging part of our business. We also interact with nearly 8 million residents on a monthly basis, and we can enhance the resident experience well beyond just payments and screening and insurance. And then we work with a number of owners, where we've invested in enhancing the owner experience and delivered a much different experience just this year. Our owners are buying and selling real estate. Some of them operate and manage this, these properties themselves, but others hire property managers to manage that for them. And then, of course, we have investors or vendors. Excuse me. Vendors come, and they do the maintenance on the properties. This is where they close work orders, they receive payments. They need automated approvals to get that work done. Investors-... Owners, and property managers, and vendors, and residents, they're all interacting with each other on our platform today, and we are ultimately bringing this all together. When you think about market segments, we can go much deeper into each one. Investors and owners bring property managers, and property managers bring more residents and vendors. This creates control points and virtuous cycles of business that can all happen on the AppFolio platform. By having the platform that powers industry segments, and industry segments power market segments, we ultimately become the platform where real estate comes to do business. That grows our opportunity well beyond 51 million units. It connects AppFolio to $1.9 trillion assets under management. It connects us to over 25 million owners with rentals. It connects us to 624,000 home service providers, and connects us to 128 million residents in rental units. With our focus on real estate, we are not opportunity constrained, and we are positioning ourselves and our platform to go take advantage of this vast opportunity ahead, where the entire industry can come to do business with AppFolio. Now, what I just shared is our long-term vision, and we're not quite there yet. And so in the near term, over the next three years, we are relentlessly focused on growing units, revenue, and margin while building the foundations of the AppFolio platform. Growing units, revenue, and margin is achieved by delivering exceptional value to our customers, by being a healthy business ourselves, and cultivating a high-performance culture. To succeed, we're really gonna align on three areas. The first is we will differentiate ourselves to win, and this is really about leveraging our head start in AI, to differentiate with Realm and Realm-X and win new customers. We also will focus on unlocking upmarket growth, and this is really done by winning mixed portfolios. We'll continue to extend the value we deliver of our platform through our Stack ecosystem. The second is to focus on efficient value delivery. By providing exceptional service, through our Stack solution partners, which we recently announced, in elevating our customer care, we can scale our business and elevate our customers in the process. This will deliver a better customer experience, so they can easily achieve success on our platform and get the help they need when and how they need it. We're also taking a fresh look to effectively scale our capabilities, our processes, looking at our internal systems, so we can adapt and grow this business. And the third, and one of the most important, of course, is to focus on our people and culture. We wanna enable a thriving culture that deeply cares about the success of our customers and AppFolio achieving our goals, while being consistent and disciplined in how we reward a performance culture. We do this by streamlining our people, processes, our programs, our systems, enabling all AppFolions to deliver exceptional results. We expect AppFolio to be a destination for the best talent in our industry. This is our three-year strategy. We've walked you through our long-term vision, and that is how we're thinking about today and our future. Now, I'm gonna hand it over here to our Senior Vice President of Product, Will Moxley. But before I do that, I wanna share with you all the Evernest customer- Property management is really three things: it's workflows, it is communication, and it is accounting. And AppFolio does a great job of all three, and we especially think they do a great job on the accounting side. Birmingham is a great place. Don't tell anybody. It's known for its food. It has great restaurants, and surprisingly, a lot to do for a small, sleepy Southern town. It was where we cut our teeth. It was where we were buying and selling houses at the time, and it wasn't until 2012, 2013, when we started seeing property management as the opportunity versus buying and selling houses as the opportunity. When we thought about scaling a property management company very fast, we thought, "What are we gonna have to be really good at?" And that's training people. We knew that we needed a partner that understood our business. We said, "Hey, we want the user interface to be very intuitive and very easy to use, 'cause that'll help us train people a lot faster." A company like AppFolio that is committed to helping us automate as many of those processes as possible, helps us scale with the same team members that are already here. Helps us do more with less. I want our employees to feel like Evernest is like a high-functioning sports team. Do we have the right people in the right positions, and are they executing and doing the things that we need them to do? And so anytime you switch softwares, it's extremely hard, and AppFolio had a whole process for changing softwares. AppFolio made it much easier with their onboarding team. Anytime you're growing your business by hundreds of homes at one time, you need a software that is easy to integrate and easy to automate things. AppFolio plays a huge role in our acquisition strategy because we know that we can integrate businesses really effectively. So when we think about acquisitions, we want the process to be as seamless as possible. There's really two things that go into that. One is great team members, and we think at Evernest, we do a great job of hiring great team members. But the other thing is having a great technology partner, somebody that understands the acquisition business, somebody that's integrated a bunch of businesses into their software. AppFolio has given me the time to travel with my family and pursue making memories with my family, teaching my daughter how to drive, and also allowing me to coach my son's baseball team. Property management is really three things: it's workflows, it is communication, and it is accounting. AppFolio does a great job of all three, and we especially think they do- Shane mentioned, I'm Will. I run the product team. I actually got to visit Evernest earlier, that like in the summer, some point, and it was the two days we spent with them. We got to learn all about what they were, challenges they were facing, what they were trying to accomplish. It was great because when I met with them, they gave us these great product ideas that eventually made it into the product. I'll cover those as we go through some of the things that we've been doing with the product. But we're always looking to differentiate to win our product, right? That's one of the strategic pillars that Shane referred to. We're always looking, how do we make our product different? How do we make it better so that people choose us in our solution? So I'll cover some of the ways we differentiate as we go through the presentation today. So first, it's important to know what is our product vision. Our product. You heard earlier, Shane mentioned that, you know, we wanna be the platform to, that real estate does business on. Well, how do we do that? Well, it's through our product vision. So to create a world where choosing, living, and investing and owning and managing communities feels magical and effortless, freeing people to thrive. And what is this? What is it saying here? Well, first, it's saying, who's our customer? It's the property managers, of course, but it's also owners, it's investors, it is residents, and it is the vendors, even to some extent. We're trying to remove all this repetitive manual work that they have in their jobs so that, and make it a magical and effortless experience, so that we free them to do what really matters, to grow their business, like you just heard in the Evernest example, right? They're trying to acquire new companies. They're trying to grow their business and be successful. Everything we do in the product is in this lens. Like, are we doing something that's making it magical and effortless for our customers, or are we putting barriers in the way? And if it's not making it magical and effortless, we don't wanna do it, right? And so this is kind of our guiding light in the product team and in the R&D team. So we always are trying to stay one step ahead of the next technology wave. We were the first SaaS vendor in property management software. Then when mobile came along, we delivered a fully mobile experience, and this is still a differentiator for us. With mobile, you know, we are still the only vendor where the vast majority of our property management software runs on a mobile device. If you look at what some of the other competitors, they'll have maybe a maintenance component or some other component that is on the mobile phone or in a tablet. Our almost entire product is available on mobile. And then we've been investing in AI for a couple of years now and trying to catch this AI wave. But there's a new wave now, which is these, you know, generative AI and these large language models. This five-year investment in AI has positioned us really well to capitalize on this because we think it's a game changer for our industry. I think it's just a game changer for the world, period, but especially for our industry. So we're very prepared to capitalize on this, and I'll get into that. This is one of the ways we differentiate, our one powerful platform. It's an integrated experience across the whole product, whether it's on the desktop or on mobile, with seamless integrations to an ecosystem of partners, and we sell using a trusted partner sales model. This is every customer is on the same version of the software. Every customer is live in the cloud, and anytime we do a new innovation, we can deliver to all our customers instantly. And that's one of the differentiators, is that we can instantly deliver new innovation much more rapidly than a lot of our competitors, where people have to go through an upgrade process, they're on different versions, they're in different modules and different technology stacks. We have this one integrated experience. On top of that, we have Realm, our AI layer, and I'll talk more about that in a bit. And then on top of that, we have Stack, where you can extend the functionality of AppFolio with an ecosystem of PropTech partners that are specialists in different areas. That's something we announced in June of last year, and I'll go into that some more. And then above, you heard Shane mention these virtuous cycles between the investor, the property manager, the residents, the vendors, et cetera. This is kind of illustrating the different virtuous cycles that we're able to reinforce the business processes and how they flow from investor to property manager to resident. And we deliver this all on this one platform, and that's what allows us to create this seamless experience, and it's all on one technology platform. So someone, you know, a leasing agent might market a product, and then someone applies for the lease. Well, then that one turns into a screen, and then we sell them insurance when they move in. Then they collect rent, and then maybe they have an issue, and they submit a work order, which feeds into the maintenance module inside a property manager. So you get the point, but this is all possible on our platform, and we consider it to be one of our differentiators. So what are the ways we're delivering value to our customers? Well, there's three main ways, and the first one I wanna talk about is magical productivity. We run a survey every year. We ask property managers, what are your big challenges? And the number one challenge they have is operational efficiency. 76% of them say operational efficiency is their number one challenge, so productivity is really key to their business. So I mentioned earlier that we've been investing in AI for over five years. Our first product was Lisa, our AI-based automated leasing assistant. We have eight solutions in market now. We've embedded AI throughout our entire product portfolio, and so now 85% of our customers are leveraging AI in some capacity. And then, at the NAA conference this year, we announced Realm, our brand for all of our AI, and Realm-X, and I'll get into these things in a moment. But we've been making this consistent investment in AI, and we're the, really the top innovator in AI, using AI in real estate. And it's not just us that recognize this. We're not liking our own technology head here. The industry recognizes it, and we met with Sharon Wilson Geno, who runs NMHC, and Bob Pinegar, who runs NAA, these two big industry associations. They knew we were big on AI, and they wanted to understand how real estate could leverage it more. So they came out this summer and spent a day with us, had a workshop where we talked about AI and how AI can help your teams. They found it very eye-opening. I think Sharon put it perfectly when she said, "The productivity increases we'll see from generative AI will be huge. They'll give our teams time to invest back in building relationships," or as I like to put it, helping people thrive. I mentioned earlier, Realm. We've been innovating and releasing all these AI capabilities. Realm is really the umbrella brand for all of our AI innovation, whether it's the bank feed, Smart Bill Entry, Leasing Signals, or Smart Insure. The way I like to explain to people is, you know, IBM has Watson, Salesforce has Einstein, and AppFolio has Realm, and that's really the analogy I like to give people, and it really is this uber brand for all of our capabilities around AI. One of those is Realm-X, which I'll hint at and as I'll bring up in a second. So one of the new AI capabilities we released recently has to do with work order intake. And so normally, when a resident has an issue, they write something in, like, "My sink's broken." But that could mean a lot of things. It can mean your sink's cracked, it can mean the sink won't turn off and it's overflowing, it can mean it's clogged, and they don't give enough information. And so what we've done is we analyze that text, and then, based on what's said, we prompt for a series of other questions to better triage what the issue is. Like, is it a clog? Is it a sink leak? Is the faucet broken? You know, is it urgent? What's going on? That allows the property managers to be much more efficient because they understand the urgency, they understand what kind of person I need to send out to do the repair, and it gives them all the information so they can be much more efficient instead of playing phone tag or texting back and forth with the resident. So this has helped them tremendously, and we've had really great feedback about this. It's something we released. It's on the portal that the residents interact with to log their service requests. But what I'm most excited about is really Realm-X, where we've basically taken large language models and generative AI and used it as a way to interact with the product. So there's three things it can do. First, you can ask it a question. You can say, "Hey, how many leases are up for renewal at this property?" You don't need to know what reports to run. You don't need to know what filter to do. Just ask it in English what it is you're trying to accomplish. It understands our data model, it understands how our application works, it understands property management, and it will pull back that information and give it to you. But you can also ask it for help, like, "Hey, what report tells me this? Where's the rent roll? How do I find the rent roll?" And it'll tell you what report to go to, or, "How do I do this in the software?" It can explain how to navigate the software to do certain things. You can also tell it to do things, so you can. You don't need to know what screen to go to and what button to edit and do these kinds of things. You can just say, "Hey, I want to draft a welcome message to new residents to the community." It'll understand what you mean, go pull the new residents, bring them up, and then automatically author an email for you, which you can tweak or not, and then you can send that out to everybody. So something that would have taken a lot of different steps, you can do in two quick commands in the product. It's really game-changing for them. They can do it in multiple languages and basically assign a work order, any kind of thing like that, that's all possible too. You can actually take action with this, natural language interface to the product. What's most exciting to me is that you can teach it to do these things. So if you had a process, let's say it was, "Hey, find out all the people that are delinquent on their rent on the fifth of the month." You say, "Tell me everyone who's delinquent on their rent." And you said, "Draft them a message, letting them know that they're delinquent, that they'll be charged a late fee unless, you know, unless they get it in within, like, two more days." And then go, and then it sends it out, and they go, "Okay, I want you to make an automation that runs every Monday or every, like, say, fifth of the month, at 9:00 A.M. and does this process for me." And then it saves it, and you never have to do it again. So we've just immediately taken that routine manual process that people go through, automated it, so that you never have to do this again. So this product right now is in beta with a select set of customers, and this is something we'll make generally available later in 2024, but we're incredibly excited about it. We think it's game-changing because, honestly, you don't need to know how to use the software. If you know how to manage a property, you know, you know what you need to do, the app will figure it out for you, right? And it can come back with answers to questions that maybe we did not pre-program into the product. So we see it as really revolutionary, and when we show it to customers, they're always blown away, and it has definitely been a differentiator for us. There's been several situations where we were not involved in an evaluation. The customer saw our, our capabilities at the NAA conference. We got brought into the evaluation. It helped us win the deal because it showed differentiation. It showed innovation at a different level than what our competitors were doing. So we're really excited about the impact it can have, not just on our customer success, but on win rates as well, and evaluation rates. So now I'm gonna move on to the second area that we deliver value, and that is effortless experience, and that's experiences for the property manager, but their customers, too, which is just as important. That's customers, that's their residents, that's their vendors, that's their investors and owners. And as you mentioned, you see here, how much more likely are unsatisfied renters to be actively searching for a new home? Two times more likely. They wanna keep their residents happy so that they don't have vacant properties that they need to fill. So the first way we're doing this is elevating and scaling the customer experience. Basically, our client services experience. So the first thing we're doing is we're differentiating our service much more than we have in the past. We're offering new channels like chat, different mechanisms for phone, like call back, et cetera, and things like that. And depending on the pricing package you're in, we're gonna give you different level of services. And so one of the things customers do is they choose, "Well, what level of service do I need to be successful?" And then price into the appropriate package, right? And so different packages have different SLAs, and it's really all about making sure that our customers are successful. Another thing we're doing is trying to deliver exceptional value faster. We've been doing a lot of work around onboarding to streamline and accelerate the onboarding process to make it easier for customers to get on board, on our software. And you heard earlier in Evernest talking about onboarding, acquisitions that they've done, other property managers they've acquired, so we're doing a lot there. And then we're making a real emphasis on having our customers achieve value faster. Can we make it so that they're achieving, you know, instead of taking three months to start seeing value, they do it in a month, they do it in two weeks, they do it in a week? We're always trying to accelerate value for our customers, and that's a metric we actually track at the company is how, you know, Time to Value, and it's something that we really emphasize. Then probably the most interesting area is how we're doing scale and efficiency. So we've been making a big effort leveraging AI and different technology to improve our self-service capabilities so that customers can self-diagnose and solve these problems and, and deflect. And we've had a lot of success with that. We're also leveraging those large language models to train new reps that we have, new customer service reps, so that we have these models that basically understand our software. The rep can ask a question, the software answer it, and that'll help the rep be more prepared in answering the question to the customer, and that's something we've built internally. And the thing I'm most excited about is the solution partners. So we have had these Stack partners that have been technology PropTech partners. We now have these solution partners that will help with accounting, bookkeeping, or we're now recruiting partners that will help with implementations, consulting, advice, business advice. And we're building out this ecosystem of solution partners that can now help our customers be successful. So it's not just our employees that are helping, but an ecosystem of service providers that can help our customers be successful, and I think that's awesome as we move upmarket. As we get more customers, we need that to be able to scale as an organization. So one of the big constituents that's really important is the owner, because the owner owns a property, right? Property managers need owners to, to grow their business. So we've made a big investment in the owner experience. We used to just offer you these static, owner packets that had some performance reports, like, every month on your property. Now we have a live dashboard showing your total income, total expenses, your disbursements, you know, everything on there, kinda showing your overall performance. We show you property detail now. We have live reports you can run, so you can see live data. We show you all the maintenance tickets that are being submitted on your property, and we even send it to you for approval. So if something needs a repair, needs contribution, like it's gonna cost money, they can approve that work order and even contribute funds right there through the payment platform for that repair. So we have added just a wealth of new things, document e-signature capabilities for the owner so that the property manager can provide a more, a better customer experience and a more competitive experience for their owners. I saw one of you in one of the analyst reports actually put some screenshots in there, and I love that. I got a kick out of that. The product team always loves to see when people recognize the things they build, and so that was exciting. And our customer feedback on this has been, like, immensely positive. Like, really, really positive. So we're excited about it. Now, we're also thinking about the resident. How do we improve the resident experience? And so there's a couple ways. First is this new Flexible Rent offering, where, you know, depending on, you know, the resident, how the resident gets paid, how frequently, we can put together a payment plan for them, a payment schedule, so that they make sure that they pay their rent. This ensures to the property manager they're getting paid their rent, right, on time. This has been—this is something we launched recently. It's just another option, another way for the property manager to differentiate their offering. You know, certain residents love this offering. For vendors, we've added a couple new things. The first is payment preferences. They can say whether they want direct deposit, basically ACH, check deposit. Do they want a check sent to them, or do they want this new offering that we call Instant Pay? So the way Instant Pay works is, instead of having to wait, like, three days for their payment to come in, like you do with an e-check, they'll get the funds instantly. And that is charged; we charge a fee to the vendor, a percentage of the transaction, in order to do that Instant Pay. But, you know, if you're cash-strapped, that's an important thing you need. You need those funds immediately; you can do that, and that's another new offering we have that helps the vendor and gives the vendor choice and new services. So now I'm gonna move on to the last challenge, which is rapid growth. You see here, 61% of our customers say that revenue and profit growth are one of their top challenges. Our customers are trying to grow, and, and one of the areas that we're really emphasizing growth in is with these larger mixed portfolio customers. As we go upmarket, you get these bigger mixed portfolio customers that have different kinds of property types, affordable, student, etc. And we wanna be able to help these customers grow in all these different ways and support all these different types of mixed portfolios. So I'll get into what we're doing there. So we've had for a long time two different product offerings, the Core product and the Plus product. And the Plus product is really a configurable solution for growing businesses with complex or what we call mixed portfolios, different property types, looking to standardize those processes. Now, we have continued to innovate on Plus, and especially this year, we've added a lot of new capabilities to Plus. I wanna highlight some of those capabilities. So the first is we released Stack. A year ago, we released Stack in June of last year; we had about 6 partners. We're now up to 35, and there's more coming. And we're building out all the different capabilities, whether it's maintenance, smart, you know, whether it's in leasing or smart, smart tech, you know, smart home technology, collections, compliance. We're building out all these different partnerships so that our customers have more choice in how they extend the platform and the other solutions they leverage. And this is all driven from customer demand. It's the partners that they ask to, they want to partner with. And so we've been adding all these capabilities. In order to leverage Stack, you need to have Plus, or you can pay a $0.50 per unit per month license on top of Core. But one of the reasons to upgrade, obviously, Stack. You upgrade, I mean, you upgrade to Plus, you get access to all these integrations, right? Whichever ones you need, multiple, one, whatever it is. Another thing we've added to Plus is affordable housing. So if you buy Plus, you get access to affordable housing capabilities. For a long time, we supported housing choice vouchers, which is also called HUD tenant-based program, and limited LIHTC capabilities. But in the past two years, we've made a big investment and then made this generally available in June of this year. So we now support LIHTC and submitting all your LIHTC forms to the state portals, as well as HUD project-based Section 8. We've had customers using our affordable housing capabilities going back to January of this year, our charter customers, then we made it generally available in June. This is a growing area of the industry, and if you go upmarket, you're gonna see more mix. 85% of our upmarket customers have, you know, mixed portfolios, and one of the very common property types they need is affordable housing. A lot of projects can't get built if they don't have affordable housing units, so they need to be able to do all the heavy compliance work. We try to make that compliance work as magical and effortless so that they don't have to be filling out forms manually, that we're submitting things electronically to all these different services so that make it easy for them. And this has been really, really important to a lot of our customers, and so we're really excited about this, and we think it's a big area of growth, and it's one of those key reasons to upgrade. We have seen customers upgrade because of affordable housing. Now, having said that, we also do allow you to pay $1 unit a month per property or per, if you, or per unit, I should say, if you do, if you don't wanna upgrade. So we do allow you to pay an additional fee per property, but we think all the cumulative value of Plus makes it well worth it, right? Makes it well worth it. If you take all those little components that we sell individually, adds up to more than if you just upgraded. And so this has been one of those key to upgrading. Another thing that's been really compelling for upgrading is a new capability we have in there called Bulk Actions. So if you're a small property manager, let's say you have 100 units, maybe you have 5 people move out, maybe you have 2 people move out a month. No big deal. But if you have 10,000 units, you might have hundreds of people moving out, right? Especially in the summer. And so you need to be able to do these things in bulk. So we've added this new bulk pricing capability to bulk change your prices across the board, bulk move-outs, and bulk lease renewals. And these are new workflows that allow you to do things when you have 100, 200, 1,000 things that you have to process all at once. And one of our customers told us that something that used to take them a week to get done, and I think it had to do around, if I remember, it was around bulk move-outs. It used to take them a week. They do each one individually. They now can do it in one hour. So this is like the kind of like impact it has on their productivity. This is creating an effortless experience, and it's a, and we had customers at our customer conference say, "Wow, this is a no-brainer to upgrade because of something like this. Like, this saves me so much time, it's well worth the additional cost." So we've been adding all these capabilities all together. You know, we're seeing an increase in the percentage of customers that are moving to Plus, and we're really excited about the Plus offering. Now, something else we're investing in, and we haven't made a decision on the packaging of student housing, but student housing is a really key growth area. You know, there's not enough places of residence for students at these universities, especially top universities. There is not enough space, and so there's been a lot of investment from investors and property managers to grow out student housing capabilities, right? To have student housing, and they can make these flexible student housing, like they could be student housing, or they could be conventional, or they build student, or purpose-built. Everything you do in student housing is in mass... mass people move in, mass people move out, mass renewals are done. Everything happens way ahead of time and in bulk numbers because, you know, a new wave of students come in, and a wave of students come out. So it's kind of those bulk actions across the board for everything in property management. We've been building this out. This is something we have some charter customers on. We're excited about. We talked about it at the customer conference. We have not released it generally available yet. We have charter customers now, but it's an area we're excited about, and again, we have not made a decision on how we're pricing or packaging this, but it's an important property type as you go upmarket. Now, another thing we've announced, we announced this at the start of the month at the Optech conference, is the new Max offering. It's a new tier of our product, a new pricing plan, and this is really targeted at enterprise solution for large operators that are focused on customization, data insights, and driving revenues. Our biggest customers. Evernest is a great example of one of those customers, right? And I'll get into, like, one of the things that they help drive here. So let me drill into what's in that offering and what's different about it. So the first thing is Leasing CRM. So, you know, we call it CRM because if you think about it, leasing is a lot like the sales and marketing part of property management. You need to market your property, people apply, you decide on who you want, and you wanna make sure that all your units are filled, right? You want complete occupancy so that you're not losing any money. This helps agents, leasing agents, know how to work through the workflow of the leasing queue, of all the leads they get and all the applicants. They can know what the next step is that they need to do and make sure that they're moving these leads through the process, and then leasing managers can go in and track the performance of their teams. Like, who's, who's working these? Are we gonna have all these units occupied? How long does it take it to get an applicant through the whole process? And so this is really important when you have thousands of properties, 'cause then you're gonna have a lot more vacancies, and you need to be very efficient in the way you fill those vacancies and the way you market. So this is something very important to our largest customers, and we're pretty excited about this. A second area is Leasing Signals, and so it's a smart leasing feature that's a pricing decision support tool. So we integrate your pricing strategy with public data. So data that's out there from all the MLSs listing the price of different properties that are out there. And basically, the leasing agent sets their goals. Do they wanna maximize occupancy or maximize revenue? What is it they're trying to accomplish? Leveraging that, their, their goals and this public data will give them... will help them give a price, a range of prices they can offer. Your important point here is that your strategy, your goals, your data, and your pricing decisions are kept confidential and never shared. But this is something else that customers are pretty excited about. And then this is a feature that actually I first heard from Evernest. This is when I went in to visit it, they said, "Hey, this happened." God, when did we - I must have done this in the... So some point in the summer, I went out to Alabama, and they were telling us how they have their own custom maintenance app that they built, their own mobile app that their maintenance tech, and they, they try to generate revenue off of maintenance. That's a revenue center for them. And they're like: We would really like to be able to write back to the database, maintenance updates. We wanna do this, special integration with our own custom system. It would help us tremendously if we could have a read/write API. So I went and took that back to the team, and then, you know, six months later, we have it, right? And this is really important to these larger customers for a couple reasons. One, they have internal custom-built systems that they wanna self-integrate our product with their product that they've built, or a data warehouse. That's another common thing. They have a data warehouse that's aggregating data from AppFolio, aggregating data from other systems, and they wanna pull it all into one area, and they want an API like this to be able to accomplish that. So obviously, these are more sophisticated customers that have technical staff or technical consultants that can do this, but it is a compelling offering for them and something that they're willing to pay for because it is that important to their productivity, making sure all their systems are integrated together. And then finally, custom fields. And I should note two things. The Database API and Custom Fields are not available to customers until the Max tier launches in January of this year, at the start of January, which makes it... So the Max tier launches in January. Those two features are not available until January. The Leasing Signals and Leasing CRM can be bought à la carte for $1 a unit a month right now, but then in January, that'll be part of the Max offering as well. So two of these things you can buy right now if you want, à la carte. The whole thing will be available in January. So I wanna be clear about the timing of that. So... Oh, I, I didn't get into the point here. I almost forgot. So custom fields. So a lot of our customers have diverse needs, and especially as you get upmarket. So we've added custom fields to all the key objects in our database so that customers can add their own custom fields, and then these fields are available via the reports API. They're available via the reporting interface as well. They can track their own custom fields and all these objects. This is really important for them as well. Something we're really excited about and they're very excited about. So the last point I really wanna make here is that we've been making a real concerted effort to really accelerate our pace of innovation. And again, why are we able to accelerate it? Why are we able to release so much so quickly? You know, an API out to all customers if they want it within six months, it's because of this one powerful platform we talked about. Everyone on the same version of the software in the cloud, managed by us, upgraded by us, that's why we're able to do this so quickly. So we've released, you know, Leasing Signals, Leasing CRM, this progressive maintenance intake I showed you, the AI maintenance intake, Affordable Housing, so many different capabilities this year alone. And that's why I think our customer conference was such a huge success and customers were so excited. They were just like, "Wow, so much value at every single tier," whether it's in Core, in Plus, or in Max. We're just constantly adding new capabilities so our customers can be successful. And so it's been fun this past year. I've been here 2.5 years now. It's been real fun to just see the transformation we made and all the progress we made in helping our customers be successful. And why do we do it? Well, we know our customer innovation is really to help give people a place to call home. That's why we do it, right? It helps property man, especially right now, right? There's a lot more renters in the market with the interest rates being the way they are. I'm not happy about it either. you know, people need to find a place to call home, and we try to make that process simple for the property manager and for the resident and for the owners and everyone involved in that process. That's it. Thank you. Now I'm gonna turn it over to Lori. Thank you. Thanks, Will. We'll take a 20-minute break. We'll be back here at, let's see, let's call it 10:25, and we'll be returning with Lisa Horner on highlights and the customer panel. If you're attending in person, please feel free to see our demos in the Twin Peaks room right across the, the foyer there. And if you're live streaming, come back at 10:25, and we will resume with the customer panel. Let's leave that right there. Birmingham's a great place. Don't tell anybody. It's known for its food. It has great restaurants and surprisingly, a lot to do for a small, sleepy Southern town. It was where we cut our teeth. It was where we were buying and selling houses at the time, and it wasn't until 2012, 2013 when we started seeing property management as the opportunity versus buying and selling houses as the opportunity. When we thought about scaling a property management company very fast, we thought, "What are we gonna have to be really good at?" And that's training people. We knew that we needed a partner that understood our business. We said, "Hey, we want the user interface to be very intuitive and very easy to use, 'cause that'll help us train people a lot faster." A company like AppFolio that is committed to helping us automate as many of those processes as possible, helps us scale with the same team members, that are already here. Helps us do more with less. I want our employees to feel like Evernest is like a high-functioning sports team. Do we have the right people in the right positions, and are they executing and doing the things that we need them to do? And so anytime you switch softwares, it's extremely hard, and AppFolio had a whole process for changing softwares. AppFolio made it much easier with their onboarding team. Anytime you're growing your business by hundreds of homes at one time, you need a software that is easy to integrate and easy to automate things. AppFolio plays a huge role in our acquisition strategy because we know that we can integrate businesses really effectively. So when we think about acquisitions, we want the process to be as seamless as possible, and there's really two things that go into that. One is great team members, and we think at Evernest, we do a great job of hiring great team members. But the other thing is having a great technology partner, somebody that understands the acquisition business, somebody that's integrated a bunch of businesses into their software. AppFolio has given me the time to travel with my family and pursue making memories with my family, teaching my daughter how to drive, and also allowing me to coach my son's baseball team. Property management is really three things: it's workflows, it is communication, and it is accounting. AppFolio does a great job of all three, and we especially think they do a great job on the accounting side. Birmingham's a great place. Don't tell anybody. It's known for its food. It has great restaurants and surprisingly, a lot to do for a small, sleepy Southern town. It was where we cut our teeth. It was where we were buying and selling houses at the time, and it wasn't until 2012, 2013, when we started seeing property management as the opportunity versus buying and selling houses as the opportunity. When we thought about scaling a property management company very fast, we thought, "What are we gonna have to be really good at?" That's training people. We knew that we needed a partner that understood our business. We said, "Hey, we want the user interface to be very intuitive and very easy to use, 'cause that'll help us train people a lot faster." A company like AppFolio that is committed to helping us automate as many of those processes as possible, helps us scale with the same team members that are already here, helps us do more with less. I want our employees to feel like Evernest is like a high-functioning sports team. Do we have the right people in the right positions, and are they executing and doing the things that we need them to do? And so anytime you switch softwares, it's extremely hard, and AppFolio had a whole process for changing softwares. AppFolio made it much easier with their onboarding team. Anytime you're growing your business by hundreds of homes at one time, you need a software that is easy to integrate and easy to automate things. AppFolio plays a huge role in our acquisition strategy because we know that we can integrate businesses really effectively. So when we think about acquisitions, we want the process to be as seamless as possible, and there's really two things that go into that. One is great team members, and we think at Evernest, we do a great job of hiring great team members. But the other thing is having a great technology partner, somebody that understands the acquisition business, somebody that's integrated a bunch of businesses into their software. AppFolio has given me the time to travel with my family and pursue making memories with my family, teaching my daughter how to drive, and also allowing me to coach my son's baseball team. Property management is really three things: It's workflows, it is communication, and it is accounting. AppFolio does a great job of all three, and we especially think they do a great job on the accounting side. Birmingham's a great place. Don't tell anybody. It's known for its food. It has great restaurants and surprisingly, a lot to do for a small, sleepy Southern town. It was where we cut our teeth. It was where we were buying and selling houses at the time, and it wasn't until 2012, 2013 when we started seeing property management as the opportunity versus buying and selling houses as the opportunity. When we thought about scaling a property management company very fast, we thought, "What are we gonna have to be really good at?" That's training people. We knew that we needed a partner that understood our business. We said, "Hey, we want the user interface to be very intuitive and very easy to use, 'cause that'll help us train people a lot faster." A company like AppFolio that is committed to helping us automate as many of those processes as possible, helps us scale with the same team members, that are already here. Helps us do more with less. I want our employees to feel like Evernest is like a high-functioning sports team. Do we have the right people in the right positions, and are they executing and doing the things that we need them to do? And so anytime you switch softwares, it's extremely hard, and AppFolio had a whole process for changing softwares. AppFolio made it much easier with their onboarding team. Anytime you're growing your business by hundreds of homes at one time, you need a software that is easy to integrate and easy to automate things. AppFolio plays a huge role in our acquisition strategy because we know that we can integrate businesses really effectively. So when we think about acquisitions, we want the process to be as seamless as possible, and there's really two things that go into that. One is great team members, and we think at Evernest, we do a great job of hiring great team members. But the other thing is having a great technology partner, somebody that understands the acquisition business, somebody that's integrated a bunch of businesses into their software. AppFolio has given me the time to travel with my family and pursue making memories with my family, teaching my daughter how to drive, and also allowing me to coach my son's baseball team. Property management is really three things: It's workflows, it is communication, and it is accounting. AppFolio does a great job of all three, and we especially think they do a great job on the accounting side. Birmingham's a great place. Don't tell anybody. It's known for its food. It has great restaurants and surprisingly, a lot to do for a small, sleepy Southern town. It was where we cut our teeth. It was where we were buying and selling houses at the time, and it wasn't until 2012, 2013 when we started seeing property management as the opportunity versus buying and selling houses as the opportunity. When we thought about scaling a property management company very fast, we thought, "What are we gonna have to be really good at?" That's training people. We knew that we needed a partner that understood our business. We said, "Hey, we want the user interface to be very intuitive and very easy to use, 'cause that'll help us train people a lot faster." A company like AppFolio that is committed to helping us automate as many of those processes as possible, helps us scale with the same team members that are already here, helps us do more with less. I want our employees to feel like Evernest is like a high-functioning sports team. Do we have the right people in the right positions, and are they executing and doing the things that we need them to do? And so anytime you switch softwares, it's extremely hard, and AppFolio had a whole process for changing softwares. AppFolio made it much easier with their onboarding team. Anytime you're growing your business by hundreds of homes at one time, you need a software that is easy to integrate and easy to automate things. AppFolio plays a huge role in our acquisition strategy because we know that we can integrate businesses really effectively. So when we think about acquisitions, we want the process to be as seamless as possible, and there's really two things that go into that. One is great team members, and we think at Evernest, we do a great job of hiring great team members. But the other thing is having a great technology partner, somebody that understands the acquisition business, somebody that's integrated a bunch of businesses into their software. AppFolio has given me the time to travel with my family and pursue making memories with my family, teaching my daughter how to drive, and also allowing me to coach my son's baseball team. ... Property management is really three things: it's workflows, it is communication, and it is accounting. And AppFolio does a great job of all three, and we especially think they do a great job on the accounting side. Birmingham's a great place. Don't tell anybody. It's known for its food. It has great restaurants and surprisingly, a lot to do for a small, sleepy Southern town. It was where we cut our teeth, it was where we were buying and selling houses at the time, and it wasn't until 2012, 2013 when we started seeing property management as the opportunity versus buying and selling houses as the opportunity. When we thought about scaling a property management company very fast, we thought, "What are we going to have to be really good at?" And that's training people. We knew that we needed a partner that understood our business. We said, "Hey, we want the user interface to be very intuitive and very easy to use, because that'll help us train people a lot faster." A company like AppFolio that is committed to helping us automate as many of those processes as possible, helps us scale with the same team members that are already here. Helps us do more with less. I want our employees to feel like Evernest is like a high-functioning sports team. Do we have the right people in the right positions, and are they executing and doing the things that we need them to do? And so anytime you switch softwares, it's extremely hard, and AppFolio had a whole process for changing softwares. AppFolio made it much easier with their onboarding team. Anytime you're growing your business by hundreds of homes at one time, you need a software that is easy to integrate and easy to automate things. AppFolio plays a huge role in our acquisition strategy because we know that we can integrate businesses really effectively. So when we think about acquisitions, we want the process to be as seamless as possible. And there's really two things that go into that. One is great team members, and we think at Evernest, we do a great job of hiring great team members. But the other thing is having a great technology partner, somebody that understands the acquisition business, somebody that's integrated a bunch of businesses into their software. AppFolio has given me the time to travel with my family and pursue making memories with my family, teaching my daughter how to drive, and also allowing me to coach my son's baseball team. ... is to elevate our customers. We're committed to delivering increased value over time to our customers, meeting them where they are today and partnering with them on where they're headed into the future. That's how we really define elevating our customers. Our AppFolio brand promise is to deliver an innovative real estate technology platform, right? This platform where real estate comes to do business, that is built to spark productivity for our customers, so that they can focus on what matters most in their businesses. I am honored today to welcome four of our great customers to talk to you about how they are focusing on what matters in their business and how they're partnering with AppFolio, leveraging AppFolio for their great and successful outcomes. Welcome. Thank you for being here today. Let's kick off. Brian Bellew, who's our vice president of operations for Atlas Real Estate Group, is joining us here today from Denver, Colorado. Welcome, Brian. Thank you for being here. We're also welcoming JC Castillo, a longtime AppFolio customer. He's President and CEO of Velo Residential. He's local here from the Bay Area. Welcome, JC. Thank you for being here. And Christi Lamb is vice president of NP Dodge. She is thrilled to be here from Nebraska in California today. Welcome, Christi. Thank you for being here. And Jerry Tanaka, who's the Chief Operating Officer at Redwood Property Investors, and he's from just over the Bay Bridge over in Alameda. Welcome. Thank you for being here. So I have a number of questions today for the panel, and then we'll open it up to all of you, both in the room and online, to ask some questions as well. But I'm gonna kick it off here, and we'd love to hear from each of you. And, Brian, I'll start with you.... Tell us a little bit about your business and your top priorities heading into the new year. Awesome. Thank you, Lisa. Thank you for having us, everyone, and we're excited to be here. 2024, some of our... I mean, overall, start with our business. We are about 8,500 units managed. We're based in Denver, Colorado. That's our headquarters. Been in business for a little over 10 years, and we operate in 12 markets, including Denver, anywhere from Texas to Las Vegas, Phoenix, Boise, Idaho, Salt Lake City, really all over the desert Southwest. And so we do single family. We're about split in the middle between single family and multifamily property management. We have some large institutional single family clients and a joint venture that owns about 7, sorry, about 1,700 properties in our JV. We also do institutional acquisitions and dispositions and have a full-service brokerage, also an in-house construction and maintenance company, and so pretty diversified offerings within the real estate industry. As far as 2024 top priorities, we've really, as most of you know, acquisitions and people are not buying as rapidly in the economy right now. So, a lot of the focus has shifted to just operations and really driving operational excellence and looking at areas that we can improve operationally. That's really one of the big focuses in 2024. We're super excited for AppFolio Max, making some big investments in data and reporting and hiring data engineers and making sure that we can get a lot, lot of our large institutional clients the data that they need. So very, very excited for everything that AppFolio is doing around the data and the reporting side of things. Thank you, Brian. Appreciate that. Christi, if you would, tell us a little bit about your business and some of your top priorities heading into the year. Thank you, Lisa. Again, Christi Lamb with NP Dodge Management Company. NP Dodge is a full-service real estate company, founded in 1855. Wow! So we're one of the, the oldest management companies still in business today, and our property management business unit was opened in 1976. I've worked with them hand in hand for the last 25 years. Primarily, we focus on commercial, conventional multifamily, and about a third of our portfolio is affordable housing and multifamily as well. Thank you very much, Christi. Jerry, same question to you. Tell us about your business and, just your top priorities heading into the year. Jerry Tanaka, Redwood Property Investors. We're a small family private office here in the Bay Area, headquartered in Oakland, and our three major markets are Sacramento, Stockton, and then the Bay Area up to Antioch. And we have about 1,600 units, and what's different is our entire portfolio is owner and operated by us. And our priorities for this year, usually it's grow, grow, grow by acquisition, but right now, you know, we're looking to exactly what Brian said, operational excellence. I mean, it's back to basics. All of our priorities are usually stabilizing what we have bought in the last two years, but now it's operating and maintaining it better. Back to basics is renting and retaining in our business and really looking to leverage, obviously, the buzzword today, which is AI, and how we can do better things with that. Thank you very much, Jerry. Appreciate that. JC, welcome. Tell us a little bit about your business and just your top priorities heading into the year. Yeah. So everybody, thanks for joining. My name is JC Castillo, and I'm the founder of two companies, NPG Residential. NPG, we are owner-operators, just like Jerry. We have about just a little bit over 1,000 units in the Dallas-Fort Worth metro. We also have a third-party management company that we've started up. We've got about just a little bit under 2,000 units under management, third party, also focused in the Texas DFW metro. You know, what we're seeing in the market as owners and as third-party operators right now is we are seeing a huge shift away from growth, specifically related to, you know, for example, if you've got a property and you're turning units and pushing rents, we're seeing owners pull back, and we're seeing people focus on resident retention, keeping the butts in the seats right now. We're also seeing a huge focus on operational efficiency, so figuring out ways to decrease your expenses. You know, payroll is a huge component of that. AppFolio is helping us to put a tech spin on things and start to do a lot of back-office work with automation and also, personally speaking, on the virtualization side. I think that these sorts of things are really going to make us, you know, take us into 2024, but it's gonna be really we're in protect mode right now. We're not necessarily in growth mode right now. Very good. Thank you. Thank you all. And, and you touched on this a little bit about the challenges, but I'm gonna dive into it just a little bit further here with a couple of you. Like, tell us about these challenges, in the operation and driving operational efficiency or anything else that you want to talk about here. And, like, illuminate a little bit for us, like, how AppFolio helps you in surmounting those challenges. And, and, Brian, I'm gonna ask you this question first. Sure. Thank you. The two top things that come to mind for challenges, right now, number one, that we've gone from operating in 2 markets to 12 markets, in a matter of about 2 years. So there's a compliance component of operating in that many markets. We've had to hire a dedicated compliance manager to make sure that we're operating in compliance across all these markets, and that's, I would say that's one of the main challenges that's come with scale. And in a sense, property management companies are compliance companies, right? Yeah. That's where we're making sure that we're following fair housing and that we are following habitability laws on the maintenance side. Everything we touch has a layer of compliance that goes to it. So, AppFolio's done a great job. I'm really excited again, for AppFolio Max and having some custom fields to be able to track some of the compliance things as far as rental licenses that may be required in specific areas. And, we use monday.com a lot right now, but I can see a point in the future as AppFolio iterates, that we move a lot of what we're doing in monday.com into AppFolio and consolidate our tech platform. So, really excited for that. The other thing that comes to mind is maintenance. We started that, a maintenance and construction company about 18 months ago, and we've been scaling that up in all of our markets, and AppFolio has been really adaptable. We've had some- Yeah. Special requests around how we're doing the billing and invoicing around our maintenance company, and AppFolio has gone back to the drawing board and say: "Let me go to the development team." And within a week or two, they've come back and been able to adapt and make this work for us. So, really, really happy with the customer service and the speed to implement some of these requests. We're trying, Brian. We're gonna do it. Doing great. I'm very happy to hear that. Thank you. And JC, tell us a little bit... You talked about this, about the challenges, and tell us how you're applying AppFolio to really surmount these challenges. I mean, I think the market has shifted dramatically, I think, across, you know, the entire economy. I mean, people are focusing on profits right now. They're not focusing on growth, and so, you know, management companies are just like any other, you know, service. We have to maximize the profitability for our owners. Bottom line, we've got to drive profitability, and our owners wanna see that happening, and they wanna see it happening now. The other thing is that we've got to deliver a resident experience that the residents love. Those two tenets are at the key of property management. If you're not doing those two things, you're gonna go out of business, especially in today's market. So you know, what AppFolio is doing for us specifically, is they're delivering, you know, technology that is helping us to reduce, for example, reduce payroll with, for example, Lisa, which is a leasing bot. We can get rid of some of the on-site staff and reposition those staff to do better, you know, things that drive more engagement with relationships with the residents. And on the resident side, that automation, that Lisa AI bot, can also interact with a hot lead immediately, and they can do it 24/7, so they can make the resident experience that much better. And it ensures that we're gonna get that butt and convert it to a lease. These things are, you know, just as important as ever right now in the economy that we're in, and we're gonna continue to, you know, hopefully partner with people like AppFolio that will deliver that technology to make more money for our, our owners and make the residents' lives a lot better. Thank you. Thank you very much. Very insightful. Thank you for, you know, giving us a little bit of behind-the-curtain here, look into your businesses around the challenges and how we can help facilitate surmounting those challenges. So thank you for that. And I know we talked about growth and expansion being maybe a component of something that historically was your number one priority, but it still is a priority for your businesses. So let's talk a minute here about what these opportunities to expand and grow are, and how AppFolio partners and helps you to do that as well. And, Kristya, I'll kick off with you. I would agree. I think our- we're still in a growth mindset, but it has strategically shifted over the last few years, where acquisitions, just aren't as prevalent in our markets. But Nebraska and Iowa are certainly not immune to the affordable housing crisis that I think is affecting a lion's share, of, of our country. And so we're, leveraging that a little bit. Affordable housing, it, it's hard. It's not for the faint of heart from a compliance standpoint, but we do see that as a strategic area of growth for our particular management company, and so we really value the partnership that we've had with AppFolio over the last year in developing the affordable housing, platform. Yes. We have been able to take that and go back to our stakeholders and show them that a rate of return that maybe was difficult for us in the prior years is gonna be much more prevalent in the years to come, because we feel that we can double our tax credit portfolio using the technology and efficiencies with AppFolio, and create a real rate of return by still embracing the affordable housing market. Wonderful. That's great to hear. Yes, and thanks for partnering with us on building out the affordable capabilities in our product. Jerry, I'm gonna ask you the same question. So where do you see opportunity to grow and expand your business, and how can AppFolio help you to do that? Well, I like a lot of the buzzwords we're using today, where JC was saying it's all about growth, but now it's really about protection, and I really like that. And then I'm also gonna steal about elevating our customers, us, but I'm gonna use that internally about elevating our game and how we expand what we use AppFolio for. And with that is about. It's really back to the basics: renting and retaining. So with renting and leasing, we got to make our frontline members, who are so key to us in this human and management-intensive business- Yes ... to really be leasing online, I mean, in person, but then having AI do the back-end call center and really just helping on that front, and then retaining. I'd like to tell a story. When we started in 2020 with AppFolio, we were at 1.4 stars on Google. Uh. I can't believe I'm saying that on record. Good. And, um- Thank you for the honesty, Jerry. Now we're at 4.4 stars, and I say that because- ... all the tools in AppFolio have given us that good customer support and what we can do with our residents, and they're tied into the system. They all pay online, they all enter work orders online, and it's just a good resident experience, and I know that has been a direct reflection on those customer reviews. So that's a big piece that we still need to improve. And then I'd be remiss if I didn't mention our customer success manager, Chase Jamison, and Nick Vanton, who always tell me: "Jerry, you're getting behind. Why aren't you doing Lisa? Why aren't you doing Smart Maintenance?" So those are the two key pieces that I know some of this team is using right now. But that's really leveraging technology to help our in-house maintenance and construction crews, and how just to be more effective and efficient with that. And then lastly, I think a big area is just asset management, and I know there's a lot of analysts in the crowd here. And AppFolio is awesome because the data is so transparent there. You can get it so easily, run custom reports as needed, and that really makes us effective as leaders in just having informed decisions, so. Excellent, Jerry. Thank you so much. Very insightful. Thank you. All right, so we've talked a little bit and touched a little bit on AppFolio Realm AI services, but I'm gonna ask you again to just dive a little bit deeper. Maybe tell us what you're already using around AppFolio AI capabilities, what you're potentially looking to adopt to help you to better your experience with your customers, and just in general, too, what is the power of AI for your business when you look out at the future? And, Brian, I'll start with you. Thank you. So we are currently utilizing Smart Bill Entry, Smart Maintenance, and we are also using AppFolio AI for the writing marketing descriptions, which has been a really cool feature. Basically, every marketing description that we put out now has been run through AppFolio's AI, so that's been a big help. As far as going to the future, we haven't adopted Lisa yet. We're mainly on the single-family and the small multifamily side, so Lisa is a tool for larger multifamily. But we know that there's hope that Lisa will be coming to the SFR side. So, we're excited for that. We think if AppFolio is making those investments in AI for the single-family side, there's a huge opportunity there. We're excited that that's in the pipeline, and I don't think we have a timeline for it yet, but we're gonna keep pushing for that. Real broadly, I think it's just a disruptive time for property management in general. The amount of prop tech that's out there and the pace that it's iterating is astonishing. There's an AI component to a lot of that, and really excited that AppFolio is making the investments that they are and putting the emphasis on AI. Yeah. I guess so. And, you know, it's we see ourselves as like a trusted technology partner for you, and it's important for us to keep educating on what's coming down the line from our lens and ensuring that you understand what's out there and available to leverage in the AppFolio platform. So excited to hear you talk about that, Brian. JC, I'm gonna pass it over to you. Same question here. Just tell us a little bit about what maybe you're using, what you're looking to use around Realm services into the future, and just generally, how you think about AI for your business moving forward. Yeah. So I mentioned Lisa. Lisa is the leasing artificial intelligence bot, which takes the initial contact with the prospect and automates that and engages and converts it into a prospect showing, where we can get our humans in there and show the person around and lease the unit, right? All of our properties are large-scale, you know, 100-unit and above multifamily properties. Lisa is one. We're also using Smart Maintenance. We love Smart Maintenance because of the convenience for our residents. They can even go so far as to text a picture of a broken toilet bowl to Smart Maintenance, and a work order is created inside of the AppFolio software so that there's... It's a closed-loop system, meaning that, you know, we don't drop that work order and have the resident upset because they called in and nobody ever got back to them. That's a really great feature. We're really excited about revenue management signals. That's something that is coming very quickly. And revenue management is a really big tool that I'm super excited about with AppFolio, and so that is really going to make a huge difference for us in terms of, you know, getting through some of these rough times. And, you know, potentially revenue management may tell us that we need to drop our rents, not just increase our rents. We need to have our finger on the pulse at all times to make sure that we've got an optimal balance of occupancy and rents at all times to drive profitability. I think that the message I want to bring home to you guys about what's really important here is that, you know, in our business, the people that make or break us are the on-site staff, the people that are out there at the properties, that are leasing the properties, that are servicing the properties. You know, ever since the pandemic, you know, these people have been tired, they've put their lives on the lines in some cases with, you know, not knowing if they were gonna die by going to their office to do their job. You know, people want a better quality of life. They're demanding it. If we're gonna keep this talent and keep them motivated, we've got to continue to push hard to take a lot of this back-office work off of their plate and automate it with AI, automate it with other people that can help them, and that is really what's going to drive us forward into the next generation of property management. Thank you both very much. And we agree with that. So we're excited to continue to partner in the future as we bring this new technology to life and ride the wave of AI over the next years into the future here. So here's the last question today that I'm gonna ask the panel, and I'm gonna ask each of you this question here. You know, take a minute and just give it, why do you continue to choose AppFolio as your long-term partner? I think it's very interesting for us to hear that from you. Brian, you wanna kick us off? Yeah, definitely. We moved originally from Yardi to AppFolio, you know, eight to nine years ago. I think we made that change as a small property management company because AppFolio was very user-friendly, and it was just an easier tool for our portfolio managers to use than a Yardi that we didn't need at the time. As we've scaled, AppFolio has really grown along with us and made a lot of those investments that we're. We haven't outgrown AppFolio. There was a point where we thought that we probably would. We were scaling really quickly, and I don't feel that way anymore. I feel like AppFolio has, in the last few years, made some strategic moves to branch out and serve larger institutional clients and really provide the data and the reporting side of things that are gonna allow us to use AppFolio for years to come. So, I do see AppFolio as a long-term partner for us, and again, AppFolio Max, AppFolio Max, AppFolio Max. Really excited for it. It's something that we've been asking for for a long time, and we had our kind of checklist of items that we've wanted, and AppFolio Max really seems to encapsulate all those items that we wanted, so. Thanks. We're super excited that you've chosen to upgrade to Max, and we look forward to a long relationship with you as well, Brian and team. Christi, tell us a little bit about why you choose AppFolio and continue to choose us as your long-term technology partner. Absolutely. We shifted from MRI over to AppFolio in 2019. At the time, we just felt like we were a client, and we also saw a gap in our strategic use of technology. Mm. We really were looking for a partner that was cost-effective for us, that would challenge us to stay relevant with technology. Yeah. And from the beginning, when we first started this relationship from AppFolio, they were really. They, they've always been a partner from us from day one, and so we've enjoyed that. Again, they challenge us on a regular basis to make sure that we are onboarding new features, technology, and we see that as our way to stay relevant with a company that's been around for just a few decades. But we understand that we need to change, and change is necessary for us to stay relevant. And with AppFolio's focus on technology and cost effectiveness, but also core values are also important to us in a small family-owned company. For sure. And so we see that in every communication experience that we have on, with AppFolio on a regular basis, so we appreciate all of those features. Thank you, and we're thrilled to have you as a long-term customer of ours, Christi, and we look forward to lots of success in our partnership in the future. Jerry, can you answer the same question for us? Why do you continue to choose AppFolio as your long-term technology partner? I think the... it's a very important word, is the partnership, and it's been that since day one. But I'd also go back to the RFP that we had and, you know, talking with the cust-, excuse me, the competition, and I call them haters, too, 'cause it's like they were totally bad-mouthing AppFolio, saying, "If you have growth plans, you're not gonna be able to do it." You know, it's not gonna scale with you, and that's the least of our worries, obviously, because we've more than doubled since we onboarded with them. And, I mean, Brian's at 8,500, so I think we have a lot of room to grow there. And as far as the partnership, it's like, she just-- Christi just said, it's about, you know, the core values. We have the same innovation, the embracing excellence. If you look at the team at AppFolio, I really appreciate how... I don't know, is the average retention there, like, ten years? It seems everyone you talk to has been there ten years. And that speaks a lot to the culture and just the overall embracing excellence that we see every day. And so and there's always something new that our sales guys are saying: "Why aren't you doing this yet?" And so I know this is on record, so I probably have to get moving on it. Looking forward to it. Thank you very much, Jerry. Thanks for saying that, and we're thrilled to have you as a long-term customer of ours, and we do, like Shane said earlier, like our people and our culture is vital to us as a company, and we believe that our happy employees deliver an elevated service and experience for you. So it's a vital component of the strategy of our company. So thank you. JC, last question here to you. Well, you know, I think that management, property management comes down to one thing and one thing only, and that is solving problems. You know, we, we solve so many problems every single day, and I think that AppFolio is gonna continue to be a long-term partner as long as they are dedicated to helping us solve these really big problems that we are running into. And I think that my experience over the last... You know, I've been a customer since, I think it's 2012, I believe, and my experience has been, it's been shocking how much they wanna learn about the details of our problems. Like, I can tell you multiple times where I've been engaged with a lot of people on my team and AppFolio team, where they'll spend Zooms and even in-person meetings, you know, understanding the problem, asking more questions. And then, you know, that's not just with us. They must be doing it with a lot of people because they're coming back with these solutions that I feel like are solving our problem. And again, if they can continue to solve our problems, I think they're gonna continue to be a super valuable partner to us. So it... That's business one on one. I think nothing else, to me, matters more than that... values and everything, yes, important to me. But solving problems is what's going to make us successful with our owners, and it's going to make us money. Thank you, JC, very much. I remember meeting JC about nine years ago, I think, and I think we were in Dallas, and he said to us, you know, "Don't get complacent." That was his message to us about nine years ago, and we're still heeding that. We are, we are here and excited for the long-term partnership. So thank you all very much. I'm going to open it up to some questions. Lori and Brett here are going to take some questions from the room. We have time for a handful of questions from the audience as well as our streaming audience. If you have a question and you're on the webcast, please go ahead and submit that now. When we hand you the microphone, if you could say your name and your company. Thank you. It's Steven Sheldon from William Blair. You know, I think a lot of you talked about an increasing focus on cost and efficiency, versus maybe growth in the past. So I guess, what has this meant to your overall aggregate software budget? And especially as you think about the last couple of years, maybe looking forward over the next couple. And if you're spending more in this environment, such as moving to Max, I think, Brian, you talked about that, where are you seeing offsetting leverage in the budget, by using solutions from AppFolio? Maybe you want to take that, Brian? Yeah, sure. I mean, if we... We're using monday.com a lot right now, and for kind of a workflow project management tool for things that outside of AppFolio that we need to accomplish. So, if we bring a lot of those workflows into AppFolio through Max, I think we can reduce our users on monday.com or reduce it completely. We use a lot of bolt-ons to AppFolio right now with Tenant Turner for showings, Findigs for screening. So, the better AppFolio gets at these specific tasks, the more that we can offset those costs by bringing things into AppFolio and getting rid of our overall tech stack. And, it's one. It goes back to one of my 2024 goals, is I really want to consolidate our tech stack overall. I think we've surveyed our team, and that's really the number one feedback from our team, is our tech stack is too complicated right now. It's tough to use. So the more we, excuse me, the more we can bring into AppFolio, it's better for our team, and it's better for our expenses as well. Brian is a AppFolio Stack customer, and so that's our, our prop tech integration capability. So our thinking around opening up the platform is exactly for that reason, and so, many of these customers here are Stack customers, integrating into the real estate platform AppFolio. So thank you. Next question. Great, thanks for taking my question. This is Jason Salino from KeyBanc Capital Markets. You know, apologies to the AppFolio team for my question I'm going to ask, but, you know, several of you have talked about being in a friendly partnership with AppFolio. But they've instituted new fees and new raised prices. It looks like they're innovating quite a lot, but does that affect your, your views, of the company? J.C., you want to take that one? So I'm sorry, but I struggled to hear it a little bit. Maybe, Yeah. Can you repeat, repeat the question? Sure. Is this a little better? That's perfect. Thank you. Perfect. So, several of you have talked about being in a friendly partnership with AppFolio. But they've instituted new fees over the last couple of years, you know, raised prices, but they're innovating quite a lot. So does that, you know, affect your views of the company as a partner? I mean, well, look, look, I think that it goes back to the question that was asked right prior to yours, which is, you know, this is a math equation, right? So, if I'm spending more money with AppFolio for a new service, I'm going to do the math. If I'm going to drive more top-line revenue because of a service or a fee, I'm going to be willing to pay for it. So, for example, if I have to spend $1 per unit per month more for technology offering X, and I can drive, you know, let's say a rents are $1,000 a unit average that I'm bringing in total income, and I can take it from $1,000 to $1,005, well, I'm netting $4 more per unit. Now, maybe one unit ain't so big of a deal, but if you go out thousands of units, that's a huge deal. So we have to, as management companies that are looking at investment of software, we have to be able to understand the bottom line. How much are we driving top-line revenue, or conversely, if we can cut expenses? Payroll would be a great example. If there's a technology that can enable me to have a, you know, one person inside the office for every 200 units instead of two people, well, I could have just potentially saved myself $70,000 a year on a fully loaded payroll for that second person. Well, my pocketbook's going to be pretty open if you can show me something that's going to really let me be way more efficient on my payroll. If we can do the math, and I can see that the investment makes sense, we're going to be all over it. Thank you. Thank you very much, JC. Next question. Hi, this is Daniel from WCM. I guess I'm not a property manager, so I'd love your perspective on how materially, like, ahead is AppFolio's, like, pace of innovation compared to, like, other competitors? Like, you know, J.C., you talked about, you know, if the math works, you'll stay with AppFolio, but is it, you know, that big difference between AppFolio versus others, or is it kind of, you're always kind of debating and, you know, making the calculating bit by bit? You want to answer that one, Christi? Maybe you can talk about that from your perspective. ... No, No, I think, honestly, one of the reasons that we transitioned over to AppFolio, I did have some peers that had been using AppFolio even prior to our transition. And one of the notions that was appealing to us was this idea of innovation in a very accessible way. Our prior software provider may have made improvements and things of that nature, but we always felt they weren't accessible to us. It was difficult for us to onboard the changes in their software, the new technology, and AppFolio has been a completely opposite experience. It's not uncommon for us to have a What's New, you know, the What's New bubble. I get a little excited about it. Not gonna lie. Look forward to it. I am an AppFolio user. I'm in the system on a daily basis, and I look forward to those What's New. More oftentimes than not, it's exciting for me when I, you know, pop open that bubble to see what's new for the day. It's something that we've talked about with one of our AppFolio developers or, you know, our customer rep. We don't necessarily always know the timeline and things of that nature, but it lets us know that AppFolio is listening to us. Again, they're our partner in problem-solving. I would say What's New, like What's New, probably at least every other week, if not weekly, and it's multiple enhancements on a very regular cadence. And so we see that as AppFolio's initiatives, again, to staying relevant, being very proactive in technology, and so we enjoy that partnership. And again, it's very accessible. And if, if when What's New comes out, then we work in partnership with them. If it's something that is above and beyond, like a new feature that we strategically have used on a regular basis, AppFolio takes the time to make sure we have a full understanding of what those new features are, and if they need to step in and help us onboard those features, they, again, they're partnered with us to make sure that we can do that in a very streamlined way. Thank you, Christi. One more question. Hi, Ryan Tomasello with KBW. For those of you that leverage other third-party vendors for some of these services beyond the core ERP, you know, payment screening, what does that decision process look like for whether or not to go with a third party versus using, you know, someone like AppFolio? And in general, how difficult is it to switch for, you know, a service like that? Again, that's something not the core ERP, but some of these value-add services that AppFolio offers. You wanna talk about that one? Jerry and J.C., you could both tag team that one. I'll say something really quick. We were looking at a third-party service, and it was a stack partner, which I, I know is a great thing that they opened up the API for that. But when we looked at the third party, you had to actually go into another website to use it, and that just didn't work for us. We're a single source. We wanna always be within AppFolio, so we're trying our best not to use third parties, to be honest. Yes. So... And to have it in, and that's why probably Smart Maintenance will win. It's probably not helping my negotiation on that. But, that's why, we're gonna use Smart Maintenance with that- Very good. rather than third party. Thank you, Jerry. You wanna talk a little bit about that, too? You can answer that question, J.C. Yeah, you know, I mean, look, how hard is it to get out of something? I mean, it's really difficult once you work with a certain technology vendor, and then you have to unwind it. It's very, very painful. You know, from our experience, when we're looking at technology that's available from a third party versus something that's available at AppFolio, you know, we're gonna lean heavily towards AppFolio because it's gonna be integrated a lot more compactly. No matter what, there's always issues with third-party integration. You just have to accept it. There's corner cases. There's still some issues with the technology that comes out internally at AppFolio, but they get worked out pretty fast, and in general, it's pretty seamless. So, you know, for us, even if it's not 100% apples to apples, I think we'll skew towards AppFolio. But unless it's outrageously better to where, like, we're just getting way more value, then obviously we're gonna go third party. But I think that the jump ball is always gonna go to the AppFolio solution. Okay. So I think that wraps up our panel here today. You know, I'll just reiterate what we've said, all day today. We only win when our customers win in their businesses. So having customers that continue to choose, stay, grow their businesses, and advocate on behalf of our company, it is just, the honor of our work. And so really, thank you so much for being here today. It's just an honor to hear from all of you and hear from your viewpoint about your business and your relationship with AppFolio. Thank you for taking the time to talk about your experiences and your businesses so thoughtfully. Thank you very much. Really appreciate you being here. So now for our final presentation today, of the day, I'm going to invite up Fay Sien Goon, who is our Chief Financial Officer. Come on up, Fay Sien Goon. She's going to cover our financial health and strategy of the company. Fay Sien. Thank you all very much. Whoops! Thank you. Hello, everyone. Fabulous job. Okay, let's try again. Hello, everyone. It's good to see all of you here. Thank you for making the trip here, all of you, in the room, and for those online, thank you for joining us. You have heard a lot today, and you have heard from our customers as well. What I'll do is I'll capture what you have heard and translate that into how it impacts the financials. After that, Shane and Will will join me up here for Q&A. So today, we'll spend time talking about three areas. First, we'll talk about our revenue drivers and how our product innovation has played a role in our revenue drivers. And then we'll turn over to margins and talk about what we've done and what we plan for the future. And then with both together, we'll talk about the resiliency of our business and our long-term outlook. So first, let's double-click on the drivers to our consistent revenue growth. We have grown revenue to a three-year CAGR of 30%, and that's an incredible rate in today's environment. And we did that by landing new customers, by being the technology leader in the industry, and you heard that earlier today. Once on our platform, our existing customers grow organically by expanding their portfolio, and they do this through unit acquisition. And here's how this happens. An owner acquires new units, as you heard earlier. Those units are added to the portfolio platform. Or a fee manager acquires a new property to manage, and those units are then added to the platform as well. And so that drives organic unit growth. We also grow revenue through ARPU expansion. We increase our ARPU when our customers upgrade to APM+, when they use more of our value-added services, and we capture the value we deliver. We are scaling the breadth of our product scope through Stack and Stack Ecosystem, and we retain customers through our product innovation and a great customer experience. So now let me double-click on the drivers of our unit and ARPU growth. First, units. There are three takeaways on units. First, we are focusing on dominating SMB and continuing our multi-year journey moving upmarket. We see a potential, a big potential upmarket. We're doing that by building products to win residential units upmarket, by powering mixed portfolio and being the innovation leader in the industry. And you heard about our innovations in AI and Bulk Actions. Second, we are prioritizing profitable growth, and what that means is we are deprioritizing commercial, community association units. You've seen a stack. We call this CA units, community association units, and we are deprioritizing the pure-play community association units. We have seen a step change in our margins expansion, and that can only be accomplished with a relentless focus and prioritization on profitable growth. So to grow profitably, we're prioritizing residential units and deprioritizing pure-play CA units from a go-to-market perspective. Our CA units are still growing because we are powering mixed portfolio. However, when we deprioritize pure-play CA units, it impacts our total unit growth from a year-over-year perspective. Third, we grow when our customers grow. Our customers are not immune to the macroeconomic headwinds. You've heard about the impact of the high inflation, the high interest rates, and the high property value impacting the customers. It is now more expensive for our customers to expand their portfolio, and you heard that earlier. So we're seeing a slowdown in our organic expansion from our existing customer base, but our ending active units are still growing because we continue to land new customers. Our products are still winning in the marketplace, even today. Now, let's turn over to ARPU. We are growing ARPU faster than units, and that's a testament to the resiliency of our business. Our residents are using more of our value-added services, specifically payments, and our property managers are upgrading to APM+. Our investments in APM+ is paying off, and I'll double-click on this in a minute. We expect our ARPU to continue to grow in the years to come as we add more products and property types. APM+. We have invested in enhancing the APM+ package. We've launched affordable housing. We'll talk about that earlier today, which is part of our APM+. APM+ also includes Stack-... and bulk actions. Bulk Actions saves our customers an enormous amount of time. Our investments are paying off, as you can see here, with a 58% three-year CAGR. We showed you our ARPU range last year. Since then, we have grown the low end of the range by 50%, have grown the high end of the range by 10%. And as we innovate and release new products, we want to continue raising the range, and we still have room to expand ARPU. We believe we will continue expanding ARPU as our customers continue to upgrade to APM Plus. Our upcoming launch of the Max tier is a catalyst to improving ARPU. And as our customers use more of our value-added services, we'll also be able to increase ARPU, and we believe that we'll be able to increase ARPU in the years to come. Well, Shane described the many industry segments that our product touches. Our industry segments allow us to grow in every macro environment. When one segment is negatively impacted by the macro headwinds, another segment may be growing, and this is really a foundation to the resiliency of our business. Okay, let's switch gears to margins. Many of you have asked if you will see more margins, and we feel like we've delivered a lot already, but of course, more is better. So yes, we will be expanding margins in the future. So let's get into the details. Okay, let's take a minute to celebrate what we've accomplished so far. We have gone from a negative 1% operating margin just last year to almost 11% this year. Free cash flow was 1% last year and 11%, and almost 11% this year, and that's a 1,000 basis point improvement in just nine months. So fair to say there's been a step change in margin expansion. Shane spoke about aligning the structure of our organization and leadership team to maximize the synergies and drive focus. We have made ourselves more durable for our customers. We have made ourselves healthier and more financially flexible. And yes, we are committed to growing our margins. Let's get into the details of how we will do that. Last year, during this time, we talked about the key drivers to our path to profitability. This year, we are talking about the key drivers to margin expansion, and the drivers are similar. Last year, we were still in a negative territory, but over the nine months, we have demonstrated that we have the discipline and rigor to expand margins, and so we will continue what has worked. We will prioritize profitable growth and focus on growing ARPU and residential units. We're committed to being a technology leader in the industry, and we'll continue increasing the pace of innovation. And last but not least, we'll focus on operational efficiency with our systems, our processes, and our organizational structure. We have right-sized our workforce to align our organizational structure to our strategy. While it was a very hard decision, we have reduced the size of our workforce across all levels and functions. The AppFolio today is more nimble, more agile, and more ready to power the future of real estate. As we look forward, we will continue growing our headcount for key roles, and we will continue investing in innovation, but I expect that growth to be modest. The steps that we have taken thus far sets us up to continue growing revenue and improving and expanding our margins in the future. Our consistent revenue growth and healthy margins makes us a resilient, long-term focused and healthy business. Now, let's look into what that means for the long term. I've heard many of you ask about our long-term operating model. Well, here's the moment you never thought would come. Okay, it's baby steps. We're not ready to give you numbers or timelines, but we want to give you some direction on where we plan to go. We are committed to growing our top line and our bottom line. Our margin expansion is not just a moment in time. We've worked very hard to get to this point, and this leadership team is committed to prioritizing profitable revenue growth, profitable growth, increasing the pace of innovation, and focusing on operational efficiencies. So let's bring this all together. Our long-term growth starts with keeping our customers happy, listening to customers, and helping them achieve their efficiency goals through our product and value-added services. We are investing in our platform and products to scale with our customers, and we are providing a great customer experience through a differentiated service. We will continue dominating SMB and moving our market by being the technology leader, powering mixed portfolio, and creating a differentiated product. Underlying our growth framework is a foundation of operational excellence to continue expanding our margins. We have walked you through our drivers for both revenue growth and margin expansions, and we are committed to growing both revenue and margins in the years to come. With that, I would like to ask Shane and Will to join me up front for Q&A. Thanks, Fay Sien. Thanks, Fay Sien. For those in the room, you can let us know if you have a question. We'll come around with a microphone so everybody on the webcast can hear your questions. For those of you on the webcast, please type your questions in, and we'll be reading some of those on. As you ask your question, please ask one question at a time and state your name and affiliation. All right. All right. Thank you so much for doing this. That's kind of loud. Steven Sheldon from William Blair. I just wanted to ask, I guess, philosophically, as you think about, and this is probably for Fay Sien, just the budget process for the year. You know, when you think about setting the budget, is it more where you kind of have a margin target that you're planning to hit, and you think about all the strategic investments you need to you can make within that budget to, to still hit, to deliver that level of margin expansion? Or is it more you think about all the strategic investments you need to make and then kind of back into what that implies for margins? I guess, just how do you think about setting the budgetary process, especially for AOI, as you think about the year? Yeah. Well, we are right in the middle of the budget process, so this is real time. We do both. We do, we set a target of what that margin should look like, but then we also look longer term, and we want to see what is needed to grow our revenue from a top-line growth perspective and what investments are needed now. So we have to weigh the two together, to see what, you know... We want to make sure we are feeding the long-term growth, and we are getting the outcomes in a milestone way, so we can see the outcomes in the short term as well. So there's a balance between long term and short term that we are contemplating and discussing on a real-time basis, in quite high frequency. Maybe a quick one. So Max, it looks like it's targeted at larger customers, but is there like a specific size of units that would fit the best? Yeah. Will, you want to take that? Yeah. You know, it could be anything from 1,500 units and above. It really depends on their sophistication and their, and their specific needs. But I would say, like, a 100-unit customer probably doesn't need Max, unless they needed the API or something like that. It's gonna be 1,500 and above. Okay. And then maybe for Shane, when we think about the competitive landscape, you know, obviously, there's RealPage and Yardi, who are going through some litigation at the moment, kind of on the revenue management side. It sounds like you're launching a new revenue management pricing tool. Outside of that, how do you think of the opportunity against these two competitors, given kind of that overhang? Outside of? Well, I guess without the revenue management product that you just announced, do you feel like there's additional share gain opportunity with them, given this overhang that they have? Absolutely. I think, you know, if you look at our competition, they've been around a lot longer than we have. They've been, you know... We have a lot of respect for them as well, by the way, and they've done a good job of, you know, paving the way for our industry. I think what's happening now is, there's a lot of innovation happening, and companies are realizing that there are other options out there, and AppFolio is if not the best option, the option we want them to take, and we're very focused on that. And so, I think for the target audiences and industry segments in which we focus and the innovation that we're focused on and the customer experience and the things that we're doing with our renewed focus, we see a great opportunity to do that. Obviously, going upmarket, it's a displacement play anyway. It's not like these companies at the size and scale that we're looking at aren't on other systems today to run their businesses. And so we... You know, if you look at our strategy, one of the biggest reasons, the number one pillar is, hey, we need to differentiate to win, because, hey, you know, for a company to switch to AppFolio, they need to see something incredibly valuable and different, and we think we're well positioned to do that, and, we're excited about the opportunity ahead. Question on the web here from David Riley for Fay Sien: Was the margin target on the chart showing long-term margins at $1 billion in revenue to scale versus today's margin target at current revenue? The chart is showing that at $1 billion, we expect the margin to be improving from where we stand today. So we are committed. First of all, we want to answer the question that keeps coming up, which is: are we going to grow margins? So the answer is yes, and we want to show that, you know, we want to continue growing those margins, as our revenue grow to out in the years. And so we put a marker at $1 billion. It's just a marker. I think what we're ultimately trying to reinforce and let the investor community know is that we value both growth and profitability. We're not, you know, giving a target or doing those things, but we think to be a healthy business, it's both of those things, and that's what we're ultimately trying to reinforce, which is why we shared the leadership principles for this team that we shared earlier today as well. Hi, this is Daniel Lee from WCM. There's a question for Shane and Will. It's more on the culture. I'm curious, like, with the shift kind of moving upmarket to enterprise, you know, with when you guys had the SMB more focused, it had kind of a certain product culture, a certain sales culture. But, you know, with new leaders kind of leading this transition, I'm curious how the product and sales culture has had to evolve, to tailor to this, you know, new adventure you guys are going on. You want to take that? Yeah, sure. I think we're always looking at, like, basically what is broadly applicable to the market. That's something we always look at. We don't build things for one customer. We'd stop, and we look and say: "What's going to have the broadest impact to win upmarket?" And that's what we prioritize, right? So we look at the things that are most common. But generally, as an organization, we're always, like, going back to that product vision, and we're asking ourselves, like: Are we just doing the bare minimum, or are we doing something that is above and beyond what everyone else does to create a magical and special experience? And it's in the mindset of every product person, every engineer, and that's how we think about our products, is like, how do we make them different? How do we make them better? And, and holding that high bar. And if we're not happy with something, we'll just keep working on it to make it, to make it to the point where we're happy with it. I also think we didn't just show up yesterday and say, "Hey, let's figure out how we're going to go upmarket." This has been years in the making, and what AppFolio has are a lot of deeply committed people that focus on our customers and care about their success. And I think over time, we've recognized where we're headed and where we want to go, and we've been thoughtful in bringing in different capabilities, leadership, product, with our go-to-market motion that requires maybe a different selling motion upmarket to acquire those customers. And we've brought them in and kind of set certain vision or how we're going to go to market or how we're thinking about building for scale while focusing on developing the great AppFolians that we have. It's really been the combination of bringing in some new people over the last several years and developing our existing people that have been with AppFolio for a long time, that we have found gives us the best opportunity to win, be it AppFolio tenure, SaaS experience, industry experience, and then really focusing on the customers that we want to go acquire. I'll add one more thing, too, which is traditionally, you know, if you go back three years, we didn't really have partners, and we didn't have APIs and things like that. We had a reporting API, but that was kind of... That was it. And that's another mind shift change in the R&D organization, which is like, "Hey, we need partners. We need to build out a partner ecosystem. We need to build those capabilities." Customers want to customize our product, and that's an important thing when you go upmarket. Customization, openness, and open API, all those things, and that's kind of a change that we've gone through and much more open to those kinds of things because we think it's necessary to win at market. And I think having a strong ecosystem is really a compelling thing for our customers. Hi, Ryan. Ryan Tomasello with KBW. I mean, the 1,000 basis points of margin expansion in the last nine months, clearly very commendable. I guess, how should we be thinking about the potential for some near-term reinvestment of that? You know, is that something that we should consider, you know, in terms of the near-term outlook? I think, you know, we're looking at the 19%-20% you're exiting the year at in terms of operating margins. I mean, anything you can say around whether or not that's a reasonable baseline off of which you can grow, if the margin trajectory is more of a fits and starts, not as much of a straight line? Just trying to understand, you know, reinvestment, you know, of this profitability that you guys have been so, so successful in putting out recently. Yeah, I, you know, we are right in the middle of our budgeting process now, and, it's great that we are starting off, with a, you know, almost 20% margins. But as we look through next year and the year after, we are looking now into the investments that's needed to continue growing top line, as, as Shane mentioned, and how we can balance that. So we are not done yet, so stay tuned. But in January, you'll hear from us about the 2024 margin expectations, you know, our 2024 outlook. Question, please? Sorry, I'll ask another one. Jason here. So it sounds like the messaging today is that ARPU growth is, you know, probably upticking in terms of focus. So when we think about the relationship between units and ARPU growth last year, I think it was kind of 50/50. Where do you think that goes over the next couple of years? I'll take this one. So, you know, we see we are investing in growing ARPU, where the innovation that you heard this morning, we want to grow ARPU. We are also investing in growing profitable growth, so residential units is where it is. In today's environment, we saw in the last nine months that the customers are impacted by the macro, so we can't tell when the macro is going to change. We know it looks like the interest rates are high. It may be high for the coming months and quarters. So it really kind of depends from a unit perspective, how you know, how fast they change and how our customers can adapt to that change. Hard to tell for now, but what we can do is control, control what is controllable for us, and that's really just investing in, in innovation, investing in growing profitably. Hi, thank you. Can you talk a little bit about the unit economic differences between Core and Plus? I'm guessing Core is cheap to acquire customers, but they don't have a lot of units, and they probably don't take all the add-ons. Plus, it's probably a lot more expensive to acquire customers, but you get a lot of units. I'd just be curious, if you spend a dollar of sales and marketing in Core, how long that takes to pay back versus a dollar of sales and marketing in Plus, or any other context you can give us. Shane, you want to take this? We, I would say we have a very efficient go-to-market model. And I think the beautiful thing about having a three-tier offering that we have now is, acquiring new customers is always the hardest part. But once you get them on our platform and they expand, we have a long runway, to deliver value for them, and that value is an exchange of value for- that we receive as well. And so that's something that, we always look at sales and marketing to figure out how we can be efficient and how we can invest to acquire more customers, acquire more units, and drive that upgrade path. In terms of getting into specifics around payback or a dollar of this, a dollar of that, you know, I, I have nothing to comment there other than, we want to be as efficient as we possibly can, and we want to do, what's required to provide a great customer experience through our innovation, through our level of service, and making sure that we have offerings, that are applicable to all customers, and we can grow with them with their size, scale, and complexity. You know, if you look at our customer base, we have so many customers that started off at 200 units or 300 units, and now they're 5,000, right? We have a partnership and an offering set up that you can come in at any point in your life cycle, and you have a long, long runway where we're a partner that you never outgrow. And that's, I think, one of the things that's most exciting about, you know, being in our position and how we're so excited about our business. I think it's also, you heard from our customers, why it's so great to be on AppFolio's platform as well. Thanks. So to get some good information in the presentation, I think one of the ones that surprised me was the breakdown between owners, managers, and investors as one bucket, and then I think it was vendors and residents in the other. Can you maybe talk about why that is so balanced? Because I, I would, I would have thought that the first category would have been bigger, and maybe payments is, is a big component of that second bucket. And how are you thinking about expanding your relationship and monetization on the resident side? It seems like there could be a big opportunity for you guys. Is there a lot more you can do on that front? Yeah, I think there's a lot of opportunity with the resident. I mean, you heard from our customers. It's about resident retention. It's about offering a great resident experience. I mean, our customers want to keep their residents in their properties, in their apartments, and it's incredibly competitive out there. And so, you know, obviously, we do payment screening insurance, but if you look forward, there are things like move-in services, amenity management, access to your community, and local things that you can provide all through kind of one experience. And so, we are looking at all those things. And ultimately, you know, it is about the resident, but you saw from the industry segments, we want to offer a great experience like that so we can, you know, win the battle for the resident, win the property manager, win the vendor, so they have a great experience, win the investor, win the owner, because the reality is they're all interacting with each other, and they're all doing business together. And so if we can offer that experience on a single platform, then we are the platform where real estate comes to do business, and that ultimately is our long-term vision. And so the things you're hearing are exactly how we're thinking about the future. Then it's not a matter of how much opportunity, it's how we sequence those things out and make sure that we're very disciplined and focused on the right things, so we deliver the highest value priority items for our customers. But we have a long road and opportunity. We're not opportunity constrained, and it's delivering on all those things, resident experience being one of them, that will bring a great future for AppFolio and for all of you as well. Thanks. This is Andrew Phones from Brown. I wanted to ask about acquisitions. We heard from your customers, that's been a big driver of growth in past years. Given interest rates, we don't see that at the moment. So how much of a headwind is that for you currently? Sorry, ask the last part of your question again. How much of a headwind to revenue growth is your customers' lack of acquisitions? Um, how- How much of a headwind is our customers'- Yeah Lack of acquisition? Well, I think, you know, we're not gonna react to any kind of moment in time with the market. You'll see, you know, those things change, whether it's a quarter or more or whatever. And I think that's where our focus on industry segments is incredibly helpful. Because when there's a lot of, a lot of properties coming online and a lot of moving activities, then there's more property managers, there's more investors, and those types of things, and that's an area that's growing. When people are staying put, you focus on the resident experience. That's where there's a lot of opportunity as well. And so we don't think about it as headwinds as much as we think about a diversified portfolio of investments, being a platform where real estate comes to do business. And so, we're not seeing it as a headwind one way or the other. We're just seeing, hey, the market right now and our customers need us to invest and deliver on certain experiences, so in this moment in time, they can deliver for their customers, and that's how we think about it. Yeah, and we touched about, you know... Because we touch so many industry segments, when there's the macro environment that is today, it impacts one segment, the other segment may thrive because of, you know, other reasons. So as Shane was saying, we are focusing on delivering the value, and, you know, because we have so many touch points from an industry segment perspective, it makes us a really resilient business. Hi there. This is William Jellison from DA Davidson Research. Lately, I've been thinking about the similarities between AppFolio and another kind of vertical software business that's best in its class, and that's Procore Technologies, which is software for construction. And if you look at Procore today, it's almost a $1 billion business, where you aim to be, and about a quarter of their business now is from monetizing the owners that are part of their ecosystem. And, Will, we noticed the refresh that the team made to the owner platform, and it's outstanding. And it makes me wonder how AppFolio might think about capturing some of that value it's clearly created on the other side. No, I think, well, one, we are capturing some, you know, payments business from there. So, like, when they contribute funds to repair something, there's some payments business there. That's what we're doing so far. And I think that's a great opportunity in the future. Like, we, you know, I don't have anything to say right now about what we might do there, but I think that's a great growth opportunity moving into the future. It's one of those industry segments that I think has a lot of potential. Great. We have time for three more questions. Ryan? Can you just elaborate on the approach to pricing going forward? I mean, it seems like a lot of these new innovations you're bringing to market, you're, you know, including those within some of the higher tiers of the APM product, but also allowing customers to price into that individually on a per unit basis. I mean, just trying to understand how much optionality you see going forward to take right price, given how sticky the unit base could be. You had, I think, a decent price increase in AppFolio Property Manager Core back in, I think, 2021, 2020. Mm-hmm. I mean, is the approach going forward gonna be to really take price as you deliver more innovation or, or price the innovation on an à la carte basis? Just any color there. Yeah. Pricing is one that we take into consideration and we discuss. But our pricing strategy is to always align the value we deliver with the value we capture. So innovation that impacts and benefits our customers, we want to capture that, and you heard that earlier today as well from our customers. You know, they want to make sure that the innovation we provide is actually saving them money. So we are always looking into how that plays out for the different segments, and for some segments of the customers, it makes sense to upgrade, but for some other segments, it makes sense for them to do à la carte. And that's kinda how we think about how we can impact the many segments that we have. I also think it's very easy to get myopic on price, but it's about packaging. You know, if you think about our business being a SaaS business, you know, we have to earn our customers business every single year. And so there's always this, this kind of path of monetization and value. And you know, you wanna make sure that is the right exchange. And so, a lot of what you're seeing with our our three-tier offering is making sure that we, as customers look out and they grow their business, they can see the future, and they see it with AppFolio, and they're getting more and more value, even if they're spending a little bit more along the way. I think anytime we launch a new product or service, we certainly take a look at that opportunity, and we're gonna say, "Hey, should this be priced separately? Should this be bundled? Should this just be a part of our core offering?" I think big picture, we wanna be transparent in our pricing, and we wanna give our customers, over the long term, you know, a predictable runway on what they can expect over time, so they can plan for their business. Now, this year, we've made- ... You know, some changes to our business model internally, and we've made some changes to our customers. But I think longer term, we wanna be in a steady state where there's clear communication, transparency, and they see the runway value they're getting, and we deliver on that value consistently. Thank you. Any final questions from the audience? Hi, Daniel from WCM. You mentioned earlier the importance of differentiating the product compared to competitors, kind of surprising the customer. Is there something unique to, like, a process you have that allows you to do that? Is it, you know, a way you glean insight from customers, or do you have a team that's always externally aware of what the competitor are doing? Yeah, could you kind of elaborate on that? It's not a team that's aware of every competitor. I don't think like that would be more reactionary type thing. It's, I think it's one, it's that one platform that everyone's on the same version of the software, all in the cloud, and that any change we make immediately impacts everyone. I think that's it. Part of it is just that we recognize these trends ahead of time, and we invest in them. So this investment in AI goes back five years, and we've been constantly doing this. That's what sets us up. So we're always trying to anticipate the next big change in the technology industry and make sure we're prepared for that. That's just kind of like a cultural thing about us that's important to us as a company. But then the, the fact that we're able to then deliver that innovation to everybody really has to do with the way our, our whole platform is built and our whole architecture, and the fact that it's one integrated piece of software, all on the same version, every customer, all in the cloud, right? You release something new, it goes out to everyone instantly. Whereas, you know, other... In other companies, you know, well, what version are you on? Oh, you have to go through an upgrade. That might take you six months. Oh, that only works on that product, but not on these other acquisitions we did. And so we don't have that issue, and that's why that innovation gets to our customers really fast. Okay. Well, I'd like to thank all of you for joining us today and for your interest in AppFolio. Before we close, I would just like to give a shout-out to the team back there who has worked so hard. Daniel West, Stephanie Mitchell, Ryan Harris, and Susie Bluff from the marketing team, Bill Schroeder, Brad Bailey, and of course, Lori and Shia from Blueshirt. Thank you so much. For those online, this concludes our meeting today, and for those of you in the room, I invite you to lunch in the hallway. We have a hard stop at 1:00 P.M., so let's get going. Thanks, everybody. Appreciate it.