APPFOLIO INCAPPF
APPFOLIO INC Stock Compensation Disclosure
Stock-Based Compensation
We currently have two stock incentive plans: the 2015 Stock Incentive Plan (the "2015 Plan") and, the 2025 Omnibus Incentive Plan (the "2025 Plan"), which was approved by our stockholders at our 2024 annual meeting of stockholders.
We did not grant any awards under the 2025 Plan in 2024. On January 1, 2025, the 2025 Plan superseded and replaced the 2015 Plan and no further awards will be granted under the 2015 Plan, but the 2015 Plan will continue to govern outstanding awards granted under the 2015 Plan.
Under the 2025 Plan, 1,500,000 shares of our Class A common stock were initially reserved and available for grant and issuance subject to adjustment in accordance with the terms of the 2025 Plan. In addition, the number of shares of Class A common stock authorized for issuance under the 2025 Plan will be subject to an annual increase on January 31 of each calendar year during the term of the 2025 Plan, equal to the lesser of (a) the total number of shares of Class A common stock underlying awards granted under the 2025 Plan in the immediately preceding calendar year, less the sum of (i) the number of shares of Class A common stock subject to an award granted under the 2025 Plan that expired, or was canceled, forfeited or terminated, and (ii) the number of shares of Class A common stock withheld by the Company to satisfy any tax withholding obligation, in the case of each of (i) and (ii), during the immediately preceding calendar year, and (b) such smaller number of shares of Class A common stock as is determined by the Board of Directors. We granted RSUs and PSUs during 2025 pursuant to the 2025 Plan.
RSUs and PSUs represent the right on the part of the holder to receive shares of our Class A common stock at a specified date in the future and/or upon the achievement of performance conditions at the discretion of our compensation committee, subject to forfeiture of that right due to termination of employment.
Our 2025 Employee Stock Purchase Plan (the “ESPP”) authorizes the issuance of shares of our Class A common stock pursuant to purchase rights granted to our employees. The purchase price for shares purchased under the 2025 ESPP with respect to any offering period is an amount equal to 85% of the fair market value of a share of our Class A common stock on the applicable purchase date (i.e., the last trading day of the applicable offering period). Offering periods are six months long and begin on February 16 and August 16 of each year. The first offering period under the ESPP began on Monday, February 17, 2025. 1,250,000 shares of Class A common stock are authorized for issuance under the ESPP, subject to adjustment in accordance with the terms of the ESPP. In addition, commencing on January 31, 2026 and on each January 31st thereafter during the term of the ESPP, the number of shares of Class A common stock authorized for issuance under the ESPP will be increased by the lesser of (a) the number of shares of Class A common stock issued or transferred pursuant to rights granted under the ESPP during the preceding calendar year, (b) such lesser number of shares of Class A common stock as determined by our compensation committee, or (c) 1,250,000 shares of Class A common stock. For the year ended December 31, 2025, our stock-based compensation expense for the ESPP was not material.
Stock Options
A summary of activity in connection with our stock options for the year ended December 31, 2025 is as follows (number of shares in thousands):
| Number of Shares | Weighted Average Exercise Price per Share | Weighted Average Remaining Contractual Life in Years | ||||||||||||||||||
| Options outstanding as of December 31, 2024 | 129 | $ | 121.50 | 7.6 | ||||||||||||||||
| Options granted | — | — | ||||||||||||||||||
| Options exercised | (9) | 14.83 | ||||||||||||||||||
| Options cancelled/forfeited | — | 12.00 | ||||||||||||||||||
| Options outstanding as of December 31, 2025 | 120 | $ | 129.74 | 7.2 | ||||||||||||||||
| At December 31, 2025: | ||||||||||||||||||||
| Options vested and expected to vest | 120 | $ | 129.74 | 7.2 | ||||||||||||||||
| Options exercisable | 40 | $ | 129.74 | 7.2 | ||||||||||||||||
Our stock-based compensation expense for stock options was not material for the periods presented.
The total intrinsic value of options exercised in 2025, 2024 and 2023 was $1.9 million, $52.2 million and $36.4 million, respectively. This intrinsic value represents the difference between the fair value of our Class A common stock on the date of exercise and the exercise price of each option. Based on the fair value of our Class A common stock as of December 31, 2025, the total intrinsic value of all outstanding options, exercisable options, and options vested and expected to vest was $17.5 million.
Restricted Stock Units
A summary of activity in connection with our RSUs for the year ended December 31, 2025 is as follows (number of shares in thousands):
| Number of Shares | Weighted Average Grant Date Fair Value per Share | |||||||||||||
| Unvested as of December 31, 2024 | 785 | $ | 159.98 | |||||||||||
| Granted | 393 | 226.81 | ||||||||||||
| Vested | (439) | 156.35 | ||||||||||||
| Forfeited | (112) | 180.07 | ||||||||||||
| Unvested as of December 31, 2025 | 627 | $ | 200.81 | |||||||||||
Unvested RSUs as of December 31, 2025 were composed of 0.6 million RSUs with only service conditions and 0.1 million PSUs with both service conditions and performance conditions. RSUs granted with only service conditions generally vest over a four-year period, assuming continued employment through the applicable vesting date. The number of PSUs granted, as included in the above table, assumes achievement of the performance metric at 100% of the performance target. The unvested PSUs as of December 31, 2025, are subject to vesting based on the achievement of pre-established performance metrics for the year ending December 31, 2025 and will vest over a three year period, assuming continued employment through each applicable vesting date. The actual number of shares to be granted at the end of the performance period will range from 0% to 171% of the target number of shares depending on achievement relative to the performance metric over the applicable period.
We recognized stock-based compensation expense for the RSUs and PSUs of $69.4 million, $59.2 million and $51.0 million for the years ended December 31, 2025, 2024 and 2023, respectively. As of December 31, 2025, the total estimated remaining stock-based compensation expense for the aforementioned RSUs and PSUs was $100.2 million, which is expected to be recognized over a weighted average period of 2.2 years. The total fair value of RSUs and PSUs vested during the years ended December 31, 2025, 2024 and 2023 was approximately $107.1 million, $111.8 million and $82.2 million, respectively.
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 5, 2026 | Showing above |
| 2024 | Feb 6, 2025 | |
| 2023 | Feb 1, 2024 | |
| 2022 | Feb 9, 2023 | |
| 2021 | Feb 28, 2022 | |
| 2020 | Mar 1, 2021 | |
| 2019 | Mar 2, 2020 | |
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.