Company: APPF
Filing Date: 2025-10-30
Form Type: 10-Q
Source: 0001433195-25-000142
Chunk: 54

Company: APPFOLIO INC
Filing Date: 2025-10-30
Form: 10-Q
Item: Part I, Item 8
Chunk 54
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9 %Stock-based compensation, included above$1,241 $1,126 $115 10 %$3,947 $3,261 $686 21 %Percentage of revenue0.5 %0.5 %0.6 %0.6 %

Cost of revenue (exclusive of depreciation and amortization) increased for the three and nine months ended September 30, 2025, compared to the same periods in the prior year. The increase was primarily driven by higher third-party service provider costs of $15.4 million and $41.3 million, respectively, due to increased adoption and usage of our Value Added Services, combined with a $3.4 million and $4.6 million increase in personnel-related costs, including stock-based and performance-based compensation, to support growth in the business, for the respective three and nine-month periods.

We expect cost of revenue (exclusive of depreciation and amortization) for the year ending December 31, 2025, to stay relatively flat as a percentage of revenue compared to the year ended December 31, 2024.

Sales and Marketing

 Three Months EndedSeptember 30,ChangeNine Months EndedSeptember 30,Change 20252024Amount%20252024Amount% (dollars in thousands)Sales and marketing$35,912 $25,406 $10,506 41 %$103,745 $77,161 $26,584 34 %Percentage of revenue14.4 %12.3 %14.8 %13.1 %Stock-based compensation, included above$3,443 $2,071 $1,372 66 %$9,336 $5,284 $4,052 77 %Percentage of revenue1.4 %1.0 %1.3 %0.9 %

Sales and marketing expense increased for the three and nine months ended September 30, 2025, compared to the same periods in the prior year. The increase was primarily due to a $8.1 million and $17.4 million increase in personnel-related costs, including stock-based and performance-based compensation, to support growth in the business, combined with a $1.1 million and $3.8 million increase in advertising and promotion expense due to increased targeted go-to-market investment, for the respective three and nine-month periods.

We expect sales and marketing expense for the