The following discussion and analysis of our financial condition, results of operations and liquidity should be read together with our Condensed Consolidated Financial Statements and the related notes included elsewhere in this Quarterly Report and in our Annual Report.
Overview
We are a technology leader powering the future of the real estate industry. We provide a cloud-based platform on which our customers operate their businesses. We help our customers navigate an increasingly interconnected and growing network of stakeholders in their business ecosystems, including property managers, property investors, potential residents, residents, and vendors. We also provide key functionality related to critical transactions across the real estate lifecycle, including screening potential residents, sending and receiving payments, and providing insurance-related risk mitigation services. Our services enable our customers to connect communities, increase operational efficiency, deliver exceptional customer experiences, and improve financial and operational performance.
Financial Highlights for the Second Quarter of 2026
•Revenue grew 19% year-over-year to $281 million.
•Total units under management grew 8% year-over-year to 9.6 million.
•GAAP operating income grew 31% to $53 million, or 18.8% of revenue, compared to $41 million, or 17.2% of revenue in Q2 2025.
•Non-GAAP operating income grew 24% to $76 million, or 27.1% of revenue, compared to $62 million, or 26.2% of revenue in Q2 2025.
•Net cash provided by operating activities was $88 million, or 31.2% of revenue, compared to $53 million, or 22.3% of revenue in Q2 2025.
Key Business Metric
Property management units under management. We believe that our ability to increase our number of property management units under management is an indicator of our market penetration, growth, and potential future business opportunities. We define property management units under management as active or committed units under management at the period end date. We had 9.6 million and 8.9 million property management units under management as of June 30, 2026 and 2025, respectively.
Key Components of Results of Operations
Revenue
Our Subscription Services and certain of our Value Added Services are offered on a subscription basis. The subscription fees for our services vary by property type and are designed to scale with the size of our customers’ businesses. We recognize revenue for subscription-based services on a straight-line basis over the contract term beginning on the date that our service is made available. We generally invoice monthly or, to a lesser extent, annually in advance of a subscription period.
We also offer certain Value Added Services, which are not covered by our subscription fees, on a per-use basis. Usage-based fees are charged either as a percentage of the transaction amount (e.g., for certain of our electronic payment services) or on a flat fee per transaction basis generally with no minimum usage commitments (e.g., for our tenant screening and risk mitigation services). We recognize revenue for usage-based services in the period the service is rendered. Our payments services fees are recorded gross of any interchange and payment processing related fees. We generally invoice our usage-based services on a monthly basis or collect the fee at the time of service. A significant majority of our Value Added Services revenue comes from the use of our electronic payment services, tenant screening services, and risk mitigation services.
Other revenue includes fees from one-time services related to the implementation of our software solutions and other recurring or one-time fees related to our customers who are not otherwise using our Subscription Services. This includes legacy customers of businesses we have acquired where the customers haven't migrated to our Subscription Services. The fees for implementation and data migration services are billed upon signing our core subscription contract and are recognized as revenue in the period the service is rendered. Other services are billed when the services rendered are completed and delivered to the customer or billed in advance and deferred over the subscription period.
As of June 30, 2026 and 2025, we had 22,751 and 21,403 property management customers, respectively.
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Costs and Operating Expenses
Cost of Revenue (Exclusive of Depreciation and Amortization). Many of our Value Added Services are facilitated by third-party service providers. Cost of revenue paid to these third-party service providers includes, without limitation, the cost of electronic interchange and payment processing-related services to support our payments services, the cost of credit reporting services for our tenant screening services, and various costs associated with our risk mitigation service providers. These third-party costs vary both in amount and as a percentage of revenue for each Value Added Service offering. Cost of revenue also includes personnel-related costs for our employees focused on customer service and the support of our operations (including salaries, cash bonuses, benefits, and stock-based compensation), platform infrastructure costs (such as data center operations and hosting-related costs), and allocated shared and other costs. Cost of revenue excludes depreciation of property and equipment, amortization of capitalized software development costs and amortization of intangible assets.
Sales and Marketing. Sales and marketing expense consists of personnel-related costs for our employees focused on sales and marketing (including salaries, sales commissions, cash bonuses, benefits, and stock-based compensation), costs associated with sales and marketing activities, and allocated shared and other costs. Marketing activities include advertising, online lead generation, lead nurturing, customer and industry events, and the creation of industry-related content and collateral. We focus our sales and marketing efforts on generating awareness of our software solutions, creating sales leads, establishing and promoting our brands, and cultivating an educated community of successful and vocal customers.
Research and Product Development. Research and product development expense consists of personnel-related costs for our employees focused on research and product development (including salaries, cash bonuses, benefits, and stock-based compensation), fees for third-party development resources, and allocated shared and other costs. Our research and product development efforts are focused on expanding functionality and the ease of use of our existing software solutions by adding new core functionality, Value Added Services and other improvements, as well as developing new products and services. We capitalize our software development costs that meet the criteria for capitalization. Amortization of capitalized software development costs is included in depreciation and amortization expense.
General and Administrative. General and administrative expense consists of personnel-related costs for employees in our executive, finance, information technology, human resources, legal, compliance, and administrative organizations (including salaries, cash bonuses, benefits, and stock-based compensation). In addition, general and administrative expense includes fees for third-party professional services (including audit, legal, compliance, and tax services), regulatory fees, other corporate expenses, impairment of long-lived assets, gains on lease modifications, and allocated shared and other costs.
Depreciation and Amortization. Depreciation and amortization expense includes depreciation of property and equipment, amortization of capitalized software development costs, and amortization of intangible assets. We depreciate or amortize property and equipment, software development costs, and intangible assets over their expected useful lives on a straight-line basis, which approximates the pattern in which the economic benefits of the assets are consumed.
Interest Income, Net. Interest income, net includes interest earned on investment securities, amortization and accretion of the premium and discounts paid from the purchase of investment securities, and interest earned on cash deposited in our bank accounts.
Provision for income taxes. Provision for income taxes consists of federal and state income taxes in the United States.
Results of Operations
Revenue
Three Months Ended June 30, Change Six Months Ended June 30, Change
2026 2025 Amount % 2026 2025 Amount %
(dollars in thousands)
Subscription Services $ 59,800 $ 52,473 $ 7,327 14 % $ 118,022 $ 101,986 $ 16,036 16 %
Value Added Services 219,467 180,145 39,322 22 % 420,830 344,851 75,979 22 %
Other 1,857 2,957 (1,100) (37) % 4,486 6,440 (1,954) (30) %
Total revenue $ 281,124 $ 235,575 $ 45,549 19 % $ 543,338 $ 453,277 $ 90,061 20 %
The increase in revenue for the three and six months ended June 30, 2026, compared to the same periods in the prior year, was primarily attributable to an increase in the usage of our payments, tenant screening, and risk mitigation services. During the three and six months ended June 30, 2026, we also experienced growth of 8% in the number of property management units under management compared to the same periods in the prior year, which drove growth in users of our Subscription Services and Value Added Services.
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Our payment services experienced increased usage during the comparative periods as residents and property managers transacted more business online.
We expect total revenue for the year ending December 31, 2026 to increase compared to the year ended December 31, 2025 as we continue to add new customers and property management units under management, along with increased adoption and usage of our Value Added Services.
Cost of Revenue (Exclusive of Depreciation and Amortization)
Three Months Ended June 30, Change Six Months Ended June 30, Change
2026 2025 Amount % 2026 2025 Amount %
(dollars in thousands)
Cost of revenue (exclusive of depreciation and amortization) $ 102,595 $ 83,827 $ 18,768 22 % $ 197,570 $ 163,325 $ 34,245 21 %
Percentage of revenue 36.5 % 35.6 % 36.4 % 36.0 %
Stock-based compensation, included above $ 1,246 $ 1,419 $ (173) (12) % $ 2,334 $ 2,706 $ (372) (14) %
Percentage of revenue 0.4 % 0.6 % 0.4 % 0.6 %
Cost of revenue (exclusive of depreciation and amortization) increased for the three and six months ended June 30, 2026, compared to the same periods in the prior year. The increase was primarily driven by higher third-party service provider costs of $15.6 million and $30.2 million, respectively, due to increased adoption and usage of our Value Added Services for the respective three and six-month periods.
We expect cost of revenue (exclusive of depreciation and amortization) for the year ending December 31, 2026, to stay relatively flat as a percentage of revenue compared to the year ended December 31, 2025.
Sales and Marketing
Three Months Ended June 30, Change Six Months Ended June 30, Change
2026 2025 Amount % 2026 2025 Amount %
(dollars in thousands)
Sales and marketing $ 43,944 $ 36,776 $ 7,168 19 % $ 81,445 $ 67,833 $ 13,612 20 %
Percentage of revenue 15.6 % 15.6 % 15.0 % 15.0 %
Stock-based compensation, included above $ 3,633 $ 3,045 $ 588 19 % $ 6,973 $ 5,893 $ 1,080 18 %
Percentage of revenue 1.3 % 1.3 % 1.3 % 1.3 %
Sales and marketing expense increased for the three and six months ended June 30, 2026, compared to the same periods in the prior year. The increase was primarily due to a $5.2 million and $9.7 million increase in personnel-related costs, including stock-based and performance-based compensation, to support growth in the business, for the respective three and six-month periods.
We expect sales and marketing expense for the year ending December 31, 2026 to stay relatively flat as a percentage of revenue compared to the year ended December 31, 2025.
Research and Product Development
Three Months Ended June 30, Change Six Months Ended June 30, Change
2026 2025 Amount % 2026 2025 Amount %
(dollars in thousands)
Research and product development $ 50,997 $ 46,674 $ 4,323 9 % $ 100,626 $ 90,432 $ 10,194 11 %
Percentage of revenue 18.1 % 19.8 % 18.5 % 20.0 %
Stock-based compensation, included above $ 8,918 $ 8,176 $ 742 9 % $ 16,800 $ 15,107 $ 1,693 11 %
Percentage of revenue 3.2 % 3.5 % 3.1 % 3.3 %
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Research and product development expense increased for the three and six months ended June 30, 2026, compared to the same periods in the prior year. The increase was primarily due to a $3.5 million and $8.4 million increase in personnel-related costs, including stock-based and performance-based compensation, net of capitalized software development costs driven by headcount growth, for the respective three and six-month periods.
We expect research and product development expenses for the year ending December 31, 2026 to stay relatively flat as a percentage of revenue compared to the year ended December 31, 2025.
General and Administrative
Three Months Ended June 30, Change Six Months Ended June 30, Change
2026 2025 Amount % 2026 2025 Amount %
(dollars in thousands)
General and administrative $ 25,626 $ 21,936 $ 3,690 17 % $ 49,967 $ 45,287 $ 4,680 10 %
Percentage of revenue 9.1 % 9.3 % 9.2 % 10.0 %
Stock-based compensation, included above $ 6,674 $ 5,659 $ 1,015 18 % $ 12,353 $ 10,964 $ 1,389 13 %
Percentage of revenue 2.4 % 2.4 % 2.3 % 2.4 %
General and administrative expense increased for the three and six months ended June 30, 2026, compared to the same periods in the prior year. The increase for the three and six months ended June 30, 2026, was primarily due to a $2.4 million and $3.7 million increase in software and professional fees, for the respective three and six-month periods.
We expect general and administrative expenses for the year ending December 31, 2026 to stay relatively flat as a percentage of revenue compared to the year ended December 31, 2025.
Depreciation and Amortization
Three Months Ended June 30, Change Six Months Ended June 30, Change
2026 2025 Amount % 2026 2025 Amount %
(dollars in thousands)
Depreciation and amortization $ 4,985 $ 5,850 $ (865) (15) % $ 10,005 $ 12,105 $ (2,100) (17) %
Percentage of revenue 1.8 % 2.5 % 1.8 % 2.7 %
Depreciation and amortization expense for the three and six months ended June 30, 2026 decreased, compared to the same periods in the prior year as various assets have reached the end of their useful life.
We expect depreciation and amortization expenses for the year ending December 31, 2026 to stay relatively flat as a percentage of revenue compared to the year ended December 31, 2025.
Interest Income, Net
Three Months Ended June 30, Change Six Months Ended June 30, Change
2026 2025 Amount % 2026 2025 Amount %
(dollars in thousands)
Interest income, net $ 1,435 $ 1,466 $ (31) (2) % $ 3,219 $ 4,419 $ (1,200) (27) %
Percentage of revenue 0.5 % 0.6 % 0.6 % 1.0 %
Interest income for the three and six months ended June 30, 2026 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.
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Provision for income taxes
Three Months Ended June 30, Change Six Months Ended June 30, Change
2026 2025 Amount % 2026 2025 Amount %
(dollars in thousands)
Income before provision for income taxes $ 54,411 $ 41,967 $ 12,444 30 % $ 107,512 $ 78,759 $ 28,753 37%
Provision for income taxes $ 12,867 $ 5,987 $ 6,880 115 % $ 23,544 $ 11,396 $ 12,148 107%
Effective tax rate 23.7 % 14.3 % 21.9 % 14.5 %
For the three and six months ended June 30, 2026, we recorded income tax expense of $12.9 million and $23.5 million, representing an effective tax rate of 23.7% and 21.9%, respectively. Our effective tax rate differs from the U.S. federal statutory rate of 21% primarily due to state income taxes and non-deductible officers' compensation partially offset by tax benefits from research and development tax credits. For the three and six months ended June 30, 2025, 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 and development tax credits, partially offset by state income taxes and non-deductible officers' compensation.
The increase in our effective tax rate for the three and six months ended June 30, 2026, as compared to the same periods in 2025, is primarily driven by higher pre-tax income and a decrease in excess tax benefits from stock-based compensation.
Liquidity and Capital Resources
Our principal sources of liquidity continue to be cash, cash equivalents, and investment securities, as well as cash flows generated from our operations. As of June 30, 2026, we had $221.7 million in cash, cash equivalents, and investment securities. We have financed our operations primarily through cash generated from operations.
In addition, to optimize our capital structure, on September 30, 2025, we entered into the Credit Facility which provides for a $150.0 million senior secured revolving credit facility, including sublimits of $25.0 million for letters of credit and $25.0 million for swingline loans, and is scheduled to mature on September 30, 2030. We did not draw on the Credit Facility during the six months ended June 30, 2026, and as of June 30, 2026, we had no outstanding borrowings under the Credit Facility and were in compliance with the covenants under the Credit Facility. For more information regarding the Credit Facility, refer to "Credit Facility" in Note 6, Commitments and Contingencies, of our Condensed Consolidated Financial Statements.
We believe that our existing cash and cash equivalents, investment securities, and cash generated from operating activities will be sufficient to meet our working capital and capital expenditure requirements for at least the next twelve months. The available borrowing capacity under the Credit Facility provides us additional liquidity and financial flexibility.
Capital Requirements
Our future capital requirements depend on many factors, including continued market acceptance of our software solutions; changes in the number of our customers and adoption and utilization of our Value Added Services by new and existing customers; the timing and extent of the introduction of new core functionality, products and Value Added Services; and the timing and extent of our investments across our organization, including acquisitions of businesses and technologies.
We have in the past entered into, and may in the future enter into, arrangements to acquire or invest in new technologies or markets. We may, as a result of those arrangements or the general expansion of our business, be required to seek additional equity or debt financing, which may not be available on terms favorable to us or at all, impacting our ability to compete successfully, which would harm our business, results of operations, and financial condition.
During the first quarter of 2026, we repurchased 702,502 shares of our Class A common stock under the 2025 Stock Repurchase Program at an average purchase price of $177.95 per share, inclusive of broker commissions, for an aggregate repurchase price of $125.0 million, which was recorded as a reduction to stockholders' equity. We did not repurchase any shares of Class A common stock under the 2025 Stock Repurchase Program during the second quarter of 2026. As of June 30, 2026, the amount remaining available for repurchases under the 2025 Stock Repurchase Program was $125.0 million. For more information regarding our share repurchases, refer to Note 7, Share Repurchase Program, of our Condensed Consolidated Financial Statements of this Quarterly Report.
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Cash Flows
The following table summarizes our cash flows for the periods indicated (in thousands):
Six Months Ended June 30,
2026 2025
Net cash provided by operating activities $ 121,902 $ 91,108
Net cash provided by investing activities 127,022 104,559
Net cash used in financing activities (138,490) (164,693)
Net increase in cash, cash equivalents and restricted cash $ 110,434 $ 30,974
Operating Activities
Our primary source of operating cash inflows is cash collected from our customers in connection with their use of our Subscription Services and Value Added Services. Our primary uses of cash from operating activities are for personnel-related expenditures and third-party costs incurred to support the delivery of our software solutions.
The net increase in cash provided by operating activities for the six months ended June 30, 2026, compared to the same period in the prior year, was primarily due to higher cash collections from customers relative to the increase in operating expenditures.
Investing Activities
Cash provided by investing activities is generally composed of the cash paid in purchases of investment securities, maturities and sales of investment securities, purchases of property and equipment, purchases of long-term investments, business acquisition, net of cash acquired, and additions to capitalized software development.
The net increase in cash provided by investing activities for the six months ended June 30, 2026, compared to the same period in the prior year, was primarily due to lower purchases of long-term investments in 2026. For additional information, see Note 4. Investment Securities and Fair Value Measurements, of our Condensed Consolidated Financial Statements.
Financing Activities
Cash used in financing activities is generally composed of net share settlements for employee tax withholdings associated with the vesting of equity awards and repurchases of our Class A common stock offset by proceeds from the exercise of stock options and issuance of common stock under the employee stock purchase plan.
The net decrease in cash used in financing activities for the six months ended June 30, 2026, compared to the same period in the prior year, was primarily due to lower repurchases of our Class A common stock.
Non-GAAP Financial Measures
To supplement our Condensed Consolidated Financial Statements, which are prepared and presented in accordance with GAAP, this Quarterly Report contains information regarding our Non-GAAP Operating Income and Non-GAAP Operating Margin, each of which constitutes a non-GAAP financial measure. We use these non-GAAP financial measures in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.
•Non-GAAP Operating Income excludes certain non-cash or non-recurring items, including stock-based compensation expense, amortization of stock-based compensation capitalized in software development costs, and amortization of purchased intangibles, as described below. Non-GAAP Operating Margin is calculated as Non-GAAP Operating Income as a percentage of revenue.
We use each of these non-GAAP financial measures internally to assess and compare operating results across reporting periods, for internal budgeting and forecasting purposes, and to evaluate our financial performance. We believe these non-GAAP financial measures also provide useful supplemental information to investors and facilitate the analysis of our operating results and comparison of operating results across reporting periods.
In particular, we believe these non-GAAP financial measures are useful to investors and others in assessing our operating performance due to the following factors:
•Stock-based compensation expense and amortization of stock-based compensation capitalized in software development costs. We utilize stock-based compensation to attract and retain employees. It is principally aimed at aligning their interests with those of our stockholders while ensuring long-term retention, rather than to address operational
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performance for any particular period. As a result, stock-based compensation expenses vary for reasons that are generally unrelated to financial and operational performance in any particular period.
•Amortization of purchased intangibles. We view amortization of purchased intangible assets as items arising from pre-acquisition activities determined at the time of an acquisition. While these intangible assets are evaluated for impairment regularly, amortization of the cost of purchased intangibles is an expense that is not typically affected by operations during any particular period.
Our non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in our industry, as other companies may calculate non-GAAP financial results differently. In addition, there are limitations in using non-GAAP financial measures because non-GAAP financial measures are not prepared in accordance with GAAP and can exclude expenses that may have a material impact on our reported financial results. As such, non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. A reconciliation of income from operations, the most comparable GAAP measure, to Non-GAAP Operating Income and operating margin, the most comparable GAAP measure, to Non-GAAP Operating Margin, is provided in the table below. We encourage investors to review the reconciliation of these historical non-GAAP financial measures to their most directly comparable GAAP financial measures.
Reconciliation from GAAP to Non-GAAP Results
(in thousands except percentages)
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
Income from operations:
GAAP income from operations $ 52,977 $ 40,512 $ 103,725 $ 74,295
Stock-based compensation expense 20,471 18,299 38,460 34,670
Amortization of stock-based compensation capitalized in software development costs 241 241 482 482
Amortization of purchased intangibles 2,558 2,558 5,115 5,115
Non-GAAP income from operations $ 76,247 $ 61,610 $ 147,782 $ 114,562
Operating margin:
GAAP operating margin 18.8 % 17.2 % 19.1 % 16.4 %
Stock-based compensation expense as a percentage of revenue 7.3 7.8 7.1 7.7
Amortization of stock-based compensation capitalized in software development costs as a percentage of revenue 0.1 0.1 0.1 0.1
Amortization of purchased intangibles as a percentage of revenue 0.9 1.1 0.9 1.1
Non-GAAP operating margin 27.1 % 26.2 % 27.2 % 25.3 %
Critical Accounting Policies and Estimates
Our Condensed Consolidated Financial Statements and the related notes are prepared in accordance with GAAP. The preparation of our Condensed Consolidated Financial Statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting period.
There have been no material changes to our critical accounting policies and estimates described in our Annual Report that have had a material impact on our Condensed Consolidated Financial Statements and related notes.
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