Company: APPF
Filing Date: 2025-10-30
Form Type: 10-Q
Source: 0001433195-25-000142
Chunk: 32

Company: APPFOLIO INC
Filing Date: 2025-10-30
Form: 10-Q
Item: Part I, Item 1
Chunk 32
---
 the year ended December 31, 2024.

Interest Income, Net

Three Months EndedSeptember 30,ChangeNine Months EndedSeptember 30,Change20252024Amount%20252024Amount%(dollars in thousands)Interest income, net$1,690 $4,014 $(2,324)(58)%$6,109 $10,482 $(4,373)(42)%Percentage of revenue0.7 %2.0 %0.9 %1.8 %

Interest income for the three and nine months ended September 30, 2025 decreased, compared to the same periods in the prior year, primarily due to the sale of available-for-sale investment securities and lower interest rates.

21

Provision for income taxes

 Three Months EndedSeptember 30,ChangeNine Months EndedSeptember 30,Change 20252024Amount%20252024Amount% (dollars in thousands)Income before provision for income taxes$36,732 $46,582 $(9,850)(21)%$115,491 $123,168 $(7,677)(6)%Provision for income taxes$3,086 $13,576 $(10,490)(77)%$14,482 $21,834 $(7,352)(34)%Effective tax rate8.4 %29.1 %12.5 %17.7 %

For the three and nine months ended September 30, 2025, we recorded income tax expense of $3.1 million and $14.5 million, representing an effective tax rate of 8.4% and 12.5%, respectively. Our effective tax rate differs from the U.S. federal statutory rate of 21% primarily due to excess tax benefits from stock-based compensation and research & development tax credits, partially offset by state income taxes and non-deductible officers' compensation. For the three and nine months ended September 30, 2024, our effective tax rate differs from the U.S. federal statutory rate of 21% primarily due to changes in valuation allowance against deferred tax assets and excess tax benefits from stock-based compensation.

The decrease in our effective tax rate for the three months ended September 30, 2025, as compared to the same period in 2024, is primarily due to a valuation allowance released at December 31, 2024 and an increase in tax benefits from stock-based compensation and research & development tax