What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-02-01 compared with 2023-02-09 · 198 added, 181 removed, 653 unchanged (37% of the section changed)

12 unchanged sentences

We have audited the accompanying consolidated balance sheets of AppFolio, Inc.

and its subsidiaries (the “Company”) as of December 31, 2022 and 2021, and the related consolidated statements of operations, of comprehensive (loss) income, of stockholder’s equity and of cash flows for each of the three years in the period ended December 31, 2022, including the related notes (collectively referred to as the “consolidated financial statements”).

and its subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of operations, of comprehensive income (loss), of stockholders’ equity and of cash flows for each of the three years in the period ended December 31, 2023, including the related notes (collectively referred to as the “consolidated financial statements”).

We also have audited the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

24 unchanged sentences

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Impairment of Long-Lived Assets

As described in Note 9 to the consolidated financial statements, the Company decided to exit and make available for sublease certain leased office spaces.

Management reassessed the Company’s asset groupings and evaluated the recoverability of the Company’s right-of-use and other lease-related assets and determined that the carrying value of the respective asset groups was not fully recoverable.

Management utilized discounted cash flow models to estimate the fair value of the asset groups taking into consideration the time period it will take to obtain a sublessee, the applicable discount rates and the anticipated sublease income and calculated the corresponding impairment loss.

The Company recorded a net impairment of $22.0 million related to right-of-use assets and property and equipment associated with the leased office space.

The principal considerations for our determination that performing procedures relating to the impairment of long-lived assets is a critical audit matter are (i) the significant judgment by management in developing the fair value estimate of the asset groups;

(ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to the time period it will take to obtain a sublessee and the anticipated sublease income;

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Revenue Recognition

As described in Notes 2 and 15 to the consolidated financial statements, the Company’s total revenue was $620.4 million for the year ended December 31, 2023.

The Company generates revenue from customers primarily for subscriptions to access the core solutions and Value Added Services.

Revenue is recognized upon transfer of control of promised services in an amount that reflects the consideration the Company expects to receive in exchange for those services.

The Company enters into contracts that can include various combinations of services, which are generally capable of being distinct, distinct within the context of the contract, and accounted for as separate performance obligations.

Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities.

The Company recognizes revenue in proportion to the amount they have the right to invoice for certain core solutions and Value Added Services revenue, as that amount corresponds directly with the performance completed to date.

The principal consideration for our determination that performing procedures relating to revenue recognition is a critical audit matter is a high degree of auditor effort in performing procedures related to the Company’s revenue recognition.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to the impairment of long-lived assets, including controls over the valuation of the asset groups.

These procedures also included, among others (i) evaluating the reassessment of asset groupings and the recoverability of the right-of-use and other lease-related assets;

(ii) testing management’s process for developing the fair value estimate of the asset groups;

(iii) evaluating the appropriateness of the discounted cash flow models;

(iv) testing the completeness and accuracy of underlying data used in the discounted cash flow models;

and (v) evaluating the reasonableness of the significant assumptions used by management related to the time period it will take to obtain a sublessee and the anticipated sublease income.

Professionals with specialized skill and knowledge were used to assist in evaluating the appropriateness of the discounted cash flow models and evaluating the reasonableness of the significant assumptions related to the time period it will take to obtain a sublessee and the anticipated sublease income.

These procedures included testing the effectiveness of controls relating to the revenue recognition process.

These procedures also included, among others (i) evaluating revenue transactions by either (a) testing the issuance and settlement of invoices and credit memos, tracing transactions not settled to a detailed listing of accounts receivable, and testing the completeness and accuracy of data provided by management or (b) testing, on a sample basis, revenue transactions by obtaining and inspecting source documents, such as executed contracts, invoices, and cash receipts and (ii) confirming, on a sample basis, outstanding customer invoice balances as of year-end and, and for confirmations not returned, obtaining and inspecting source documents, such as executed contracts, invoices, and subsequent cash receipts.

/s/ PricewaterhouseCoopers LLP

62 unchanged sentences

Total costs and operating expenses 619,482 544,253 371,248

(Loss) income from operations ( 72,370 ) ( 11,878 ) 9,783

Other income, net 4,469 13,111 188,897

Interest income (expense), net 1,184 501 ( 1,849 )

(Loss) income before provision for income taxes ( 66,717 ) 1,734 196,831

Income (loss) from operations 963 ( 72,370 ) ( 11,878 )

Other income (loss), net 3 4,469 13,111

Interest income, net 7,031 1,184 501

Income (loss) before provision for income taxes 7,997 ( 66,717 ) 1,734

Provision for income taxes 5,295 1,402 706

Net (loss) income $ ( 68,119 ) $ 1,028 $ 158,403

Net (loss) income per common share:

Net income (loss) $ 2,702 $ ( 68,119 ) $ 1,028

Net income (loss) per common share:

Basic $ 0.08 $ ( 1.95 ) $ 0.03

14 unchanged sentences

APPFOLIO, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

1 unchanged sentence

2023 2022 2021

Net (loss) income $ ( 68,119 ) $ 1,028 $ 158,403

Other comprehensive (loss) income:

Changes in unrealized (losses) gains on investment securities ( 1,490 ) ( 250 ) 23

Comprehensive (loss) income $ ( 69,609 ) $ 778 $ 158,426

Net income (loss) $ 2,702 $ ( 68,119 ) $ 1,028

Other comprehensive income (loss):

Changes in unrealized gains (losses) on investment securities, net of tax 1,783 ( 1,490 ) ( 250 )

Comprehensive income (loss) $ 4,485 $ ( 69,609 ) $ 778

The accompanying notes to the Consolidated Financial Statements are an integral part of these statements.

2 unchanged sentences

(in thousands)

Accumulated Retained

Additional Other Earnings/

Common Stock Common Stock Paid-in Comprehensive Treasury (Accumulated

Class A Class B Capital (Loss) Income Stock Deficit) Total

Additional Other

Common Stock Common Stock Paid-in Comprehensive Treasury Retained

Class A Class B Capital (Loss) Income Stock Earnings Total

Shares Amount Shares Amount

5 unchanged sentences

Issuance of restricted stock awards 4 — — — — — — — —

Other comprehensive income — — — — — 23 — — 23

Repurchase of common stock ( 48 ) — — — — — ( 4,194 ) — ( 4,194 )

Other comprehensive loss — — — — — ( 250 ) — — ( 250 )

Net Income — — — — — — — 1,028 1,028

6 unchanged sentences

Other comprehensive loss — — — — — ( 1,490 ) — — ( 1,490 )

Net income — — — — — — — 1,028 1,028

Net loss — — — — — — — ( 68,119 ) ( 68,119 )

Balance at December 31, 2022 20,569 2 14,746 2 209,704 ( 1,684 ) ( 25,756 ) 83,278 265,546

4 unchanged sentences

Issuance of restricted stock awards 6 — — — — — — — —

Other comprehensive loss — — — — — ( 1,490 ) — — ( 1,490 )

Net loss — — — — — — — ( 68,119 ) ( 68,119 )

Other comprehensive income — — — — — 1,783 — — 1,783

Net income — — — — — — — 2,702 2,702

Balance at December 31,2023 21,749 $ 2 14,116 $ 2 $ 236,985 $ 99 $ ( 25,756 ) $ 85,980 $ 297,312

6 unchanged sentences

Cash from operating activities

Net (loss) income $ ( 68,119 ) $ 1,028 $ 158,403

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Net income (loss) $ 2,702 $ ( 68,119 ) $ 1,028

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization 26,500 30,820 29,032

1 unchanged sentence

Impairment, net — 22,022 —

Deferred income taxes ( 993 ) 250 29,002

Gain on lease modification ( 4,281 ) — —

Stock-based compensation, including as amortized 54,852 43,234 17,154

4 unchanged sentences

Accounts receivable ( 4,206 ) ( 4,198 ) ( 2,103 )

Prepaid expenses and other current assets ( 5,398 ) ( 2,168 ) ( 5,894 )

Other assets ( 1,883 ) ( 1,259 ) ( 519 )

Prepaid expenses and other assets ( 13,493 ) ( 7,281 ) ( 3,427 )

Accounts payable ( 1,565 ) 1,176 497

Accrued employee expenses 4,281 11,264 2,799

Accrued expenses 3,452 ( 1,773 ) 6,878

Operating lease liabilities ( 2,504 ) ( 2,524 ) 1,268

Other liabilities 4,329 ( 8,100 ) 9,896

Accrued expenses and other liabilities 3,744 12,062 1,391

Net cash provided by operating activities 60,283 25,365 35,391

7 unchanged sentences

Proceeds from sale of equity-method investment 629 40 12,520

Net cash (used in) provided by investing activities ( 6,466 ) ( 110,459 ) 146,511

Net cash used in investing activities ( 55,582 ) ( 6,466 ) ( 110,459 )

Cash from financing activities

1 unchanged sentence

Tax withholding for net share settlement ( 28,556 ) ( 10,637 ) ( 9,962 )

Payment of contingent consideration — — ( 5,977 )

Proceeds from issuance of debt — — 50,752

Principal payments on debt — — ( 99,565 )

Purchase of treasury stock — — ( 4,194 )

Net cash used in financing activities ( 25,961 ) ( 6,163 ) ( 7,348 )

Net increase (decrease) in cash and cash equivalents 12,736 ( 82,416 ) 124,452

Net (decrease) increase in cash and cash equivalents ( 21,260 ) 12,736 ( 82,416 )

Cash, cash equivalents and restricted cash

7 unchanged sentences

Supplemental disclosure of cash flow information

Cash paid for interest $ — $ — $ 1,815

Cash paid for income taxes $ 8,086 $ 3,338 $ 9,324

4 unchanged sentences

Cash and cash equivalents $ 49,509 $ 70,769 $ 57,847

Restricted cash included in other assets 250 436 436

Restricted cash included in other long-term assets

Total cash, cash equivalents and restricted cash $ 49,759 $ 71,019 $ 58,283

7 unchanged sentences

Digital transformation is effectively a requirement for business success in the modern world, and the way we work and live requires powerful software solutions.

During the year ended December 31, 2020, we also provided cloud-based solutions and services to the legal industry via MyCase, a solution primarily designed for small and mid-sized law firms.

As previously disclosed, we completed the sale of MyCase, Inc.

on September 30, 2020.

For additional details, see Note 3, Sales of Subsidiary Businesses .

Summary of Significant Accounting Policies

2 unchanged sentences

Reclassification

We reclassified certain amounts in our Consolidated Balance Sheets and Consolidated Statements of Cash Flows within the cash flows from operating activities section in the prior year to conform to the current year's presentation.

We reclassified certain amounts in our Consolidated Statements of Cash Flows within the cash flows from operating activities section in the prior year to conform to the current year's presentation.

Principles of Consolidation

9 unchanged sentences

The preparation of financial statements in conformity with GAAP 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 revenue, expenses, other income, and provision for income taxes during the reporting period.

Assets and liabilities which are subject to judgment and use of estimates include the fair value of financial instruments, capitalized software development costs, period of benefit associated with deferred costs, incremental borrowing rate used to measure operating lease liabilities, the recoverability of goodwill and long-lived assets, income taxes, useful lives associated with property and equipment and intangible assets, contingencies, assumptions underlying performance-based compensation (whether cash or stock-based), and assumptions underlying stock-based compensation.

Assets and liabilities which are subject to judgment and use of estimates include the fair value of financial instruments, useful lives of property and equipment and intangible assets, capitalized software development costs, incremental borrowing rate applied in lease accounting, impairment of goodwill and long-lived assets, period of benefit associated with deferred costs, stock-based compensation, income taxes, and contingencies.

Actual results could differ from those estimates and any such differences may have a material impact on our Consolidated Financial Statements.

8 unchanged sentences

Concentrations of credit risk with respect to accounts receivable and revenue are limited due to a large, diverse customer base.

No individual customer represented 10% or more of accounts receivable at December 31, 2022 and 2021 or revenue for the years ended December 31, 2022, 2021 and 2020.

As of December 31, 2023, (i) no individual customer exceeded 10% of our total revenues in any of the periods presented, and (ii) 26 % of our accounts receivable balance was attributable to amounts due from a risk mitigation provider.

For purposes of assessing concentration of credit risk and significant customers, a group of residents that are receiving services from a third party that controls and transfers the specified services are regarded as one single customer.

Fair Value Measurements

8 unchanged sentences

Investment Securities

Our investment securities currently consist of corporate bonds, United States government agency securities and treasury securities.

Our investment securities currently consist of United States government agency securities and treasury securities.

We classify investment securities as available-for-sale at the time of purchase and reevaluate such classification at each balance sheet date.

11 unchanged sentences

We do not have any off-balance sheet credit exposure related to our customers.

At December 31, 2022 and 2021, our allowance for credit losses was not material.

As of December 31, 2023 and 2022, our allowance for credit losses was not material.

Property and Equipment

20 unchanged sentences

We do not transfer ownership of our software, license, or lease our software to third parties.

Goodwill and Intangible Assets

Goodwill is tested for impairment at least annually at the reporting unit level or at other times if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.

Goodwill and Intangible Assets, Net

Goodwill is tested for impairment at least annually at the reporting unit level or at other times whenever events or changes in circumstances indicate that goodwill might be impaired.

A qualitative assessment is performed to determine whether it is more likely than not that the fair value of its reporting unit is less than its carrying amount.

2 unchanged sentences

We test for goodwill impairment annually during the fourth quarter of the calendar year.

Based on the assessment performed at November 1, 2022, we determined it was not more likely than not that our reporting unit fair value was less than its carrying value and no quantitative impairment test assessment was required.

Based on the annual assessment performed at November 1, 2023, we determined it was not more likely than not that our reporting unit fair value was less than its carrying value and no quantitative impairment test assessment was required.

No impairment losses were recorded for goodwill during the years ended December 31, 2023, 2022 and 2021.

Intangible assets primarily consist of acquired database and technology, non-compete agreements, customer and partner relationships, trademarks and trade names, domain names and patents, which are recorded at cost, less accumulated amortization.

Intangible assets primarily consist of acquired database, domain names and patents, which are recorded at cost, less accumulated amortization.

We determine the appropriate useful life of our intangible assets by performing an analysis of expected cash flows of the acquired assets.

1 unchanged sentence

Impairment of Long-Lived Assets

We assess the recoverability of our long-lived assets when events or changes in circumstances indicate that the carrying value of an asset may not be recoverable or that the useful lives of those assets are no longer appropriate.

An impairment charge would be recognized when the carrying amount of a long-lived asset or asset group is not recoverable and exceeds its fair value.

The carrying amount of a long-lived asset or asset group is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset or asset group.

We assess the recoverability of our long-lived assets when events or changes in circumstances indicate that the carrying value of an asset may not be recoverable.

Recoverability is measured by comparing the carrying amount of the asset or asset group to the future undiscounted cash flows we expect the asset or asset group to generate.

Any excess of the carrying value of the asset or asset group above its fair value is recognized as an impairment loss.

We recorded net lease-related impairment charges of $ 22.0 million for the year ended December 31, 2022.

6 unchanged sentences

Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities.

We recognize revenue in proportion to the amount we have the right to invoice for certain core solutions and Value Added Services revenue, as that amount corresponds directly with our performance completed to date.

We recognize revenue in proportion to the amount that we have the right to invoice for certain core solutions and Value Added Services revenue, as that amount corresponds directly with our performance completed to date.

Refer to Note 15, Revenue and Other Information for the disaggregated breakdown of revenue between Core solutions, Value Added Services and Other revenue.

21 unchanged sentences

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.

Deferred Revenue

We record deferred revenue when cash payments are received in advance of our performance.

Deferred revenue as of December 31, 2022 and 2021 was $ 0.9 million and $ 2.5 million, respectively.

During the twelve months ended December 31, 2022 and 2021, we recognized revenue of $ 2.4 million and $ 2.2 million, respectively, that were included in the deferred revenue balances at December 31, 2021 and 2020, respectively.

Remaining Performance Obligations

Transaction price allocated to remaining performance obligations (“RPO”) represents contracted revenue that has not been recognized, which includes deferred revenue and non-cancelable amounts that will be invoiced and recognized as revenue in future periods.

RPO does not include revenue related to performance obligations that are part of a contract whose original expected duration is one year or less or related to usage-based Value Added Services that are billed in arrears.

As of December 31, 2022, the total non-cancelable RPO under our contracts with customers was $ 15 million, and we expect to recognize revenue on approximately 47 % of these RPO over the following 12 months, with the balance to be recognized thereafter.

Deferred Costs

4 unchanged sentences

Amortization expense for the deferred costs is included within sales and marketing expense in the accompanying Consolidated Statements of Operations.

Deferred costs were $ 15.8 million and $ 12.4 million at December 31, 2022 and 2021, respectively, of which $ 8.1 million and $ 6.4 million, respectively, are included in Prepaid expenses and other current assets and $ 7.7 million and $ 6.0 million, respectively, are included in Other assets in the accompanying Consolidated Balance Sheets.

Deferred costs were $ 15.9 million and $ 15.8 million as of December 31, 2023 and 2022, respectively, of which $ 8.7 million and $ 8.1 million, respectively, are included in Prepaid expenses and other current assets and $ 7.2 million and $ 7.7 million, respectively, are included in Other long-term assets in the accompanying Consolidated Balance Sheets.

Amortization expense for deferred costs was $ 9.5 million, $ 8.1 million, and $ 6.8 million for the years ended December 31, 2023, 2022, and 2021, respectively.

18 unchanged sentences

General and administrative expense consists of personnel-related costs for employees in our executive, finance, information technology, human resources, legal, compliance, corporate development and administrative organizations (including salaries, performance-based compensation, 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), transaction costs related to sales of subsidiary businesses, regulatory f, other corporate expenses, impairment of long-lived assets, and allocated shared costs.

In addition, general and administrative expense includes fees for third-party professional services (including audit, legal, compliance, and tax services), transaction costs related to sales of subsidiary businesses, regulatory fines and penalties, other corporate expenses, impairment of long-lived assets, and allocated shared costs.

Depreciation and Amortization

3 unchanged sentences

We recognize stock-based compensation expense for restricted stock awards ("RSAs") and restricted stock units ("RSUs") with only service conditions on a straight-line basis over the requisite service period.

For RSUs with both service and performance conditions (performance share units ("PSUs")), compensation cost is recorded on a graded-vesting method, if it is probable that the performance condition will be achieved.

For RSUs with both service and performance conditions ("PSUs"), compensation cost is recorded on a graded-vesting method, if it is probable that the performance condition will be achieved.

Adjustments to compensation expense are made each period based on changes in our estimate of the number of PSUs that are probable of vesting.

4 unchanged sentences

The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the Consolidated Statements of Operations in the period that includes the enactment date.

A valuation allowance is recorded when it is more likely than not that some of the deferred tax assets will not be realized.

A valuation allowance is recorded when it is more

likely than not that some of the deferred tax assets will not be realized.

In evaluating the need for a valuation allowance, we consider the weighting of all available positive and negative evidence, which includes, among other things, the nature, frequency and severity of current and cumulative taxable income or losses, future projections of profitability, and the duration of statutory carryforward periods.

Net (Loss) Income per Common Share

Basic net (loss) income per share includes no dilution and is computed by dividing net (loss) income for the period by the weighted average number of common shares outstanding during the period.

Net Income (Loss) per Common Share

Basic net income (loss) per share includes no dilution and is computed by dividing net income (loss) for the period by the weighted average number of common shares outstanding during the period.

Diluted net income per share is computed by dividing net income for the period by the weighted average number of shares of common stock and potentially dilutive common stock outstanding during the period.

1 unchanged sentence

The calculation of diluted net income per share excludes all anti-dilutive common shares.

Net (loss) income per common share was the same for shares of our Class A and Class B common stock because they are entitled to the same liquidation and dividend rights and are therefore combined in the table below.

The following table presents a reconciliation of the weighted average number of shares of our Class A and Class B common stock used to compute net (loss) income per common share (in thousands):

Net income (loss) per common share was the same for shares of our Class A and Class B common stock because they are entitled to the same liquidation and dividend rights and are therefore combined in the table below.

The following table sets forth the computation of basic and diluted net income (loss) per common share (in thousands):

Year Ended December 31,

2023 2022 2021

Basic net income (loss) per share:

Net income (loss) attributable to common stockholders

$ 2,702 $ ( 68,119 ) $ 1,028

Weighted average common shares outstanding 35,636 35,015 34,583

2 unchanged sentences

basic 35,629 35,010 34,578

Net income (loss) per common share;

basic $ 0.08 $ ( 1.95 ) $ 0.03

Diluted net income (loss) per share:

Net income (loss) attributable to common stockholders $ 2,702 $ ( 68,119 ) $ 1,028

Weighted average common shares outstanding;

basic 35,629 35,010 34,578

Weighted average options, restricted stock units and restricted shares used to compute diluted net income per common share — 1,123 1,449

Weighted average dilutive options outstanding 333 — 959

Weighted average dilutive RSUs outstanding 455 — 164

Weighted average common shares outstanding;

diluted 36,417 35,010 35,701

For the years ended December 31, 2021 and 2020, an aggregate of 181,000 and 79,000 shares, respectively, underlying performance-based restricted stock units ("PSUs") were not included in the computations of diluted and anti-dilutive shares as they are considered contingently issuable upon satisfaction of pre-defined performance measures and their respective performance measures had not been met.

Restricted stock units ("RSUs") with an anti-dilutive effect were excluded from the calculation of weighted average number of shares used to compute diluted net income per common share and they were not material for the years ended December 31, 2021 and 2020.

Because we reported a net loss for the years ended December 31, 2022, all potentially dilutive common shares are anti-dilutive for these periods and have been excluded from the calculation of net loss per share.

Recent Accounting Pronouncements Not Yet Adopted

Net income (loss) per common share;

diluted $ 0.07 $ ( 1.95 ) $ 0.03

Potentially dilutive securities that are not included in the calculation of diluted net income (loss) per share because doing so would be antidilutive are as follows (in thousands):

Year Ended December 31,

2023 2022 2021

Unvested Restricted Stock Awards 6 6 4

Options 120 516 846

Restricted Stock Units 20 1,162 837

Total potentially dilutive securities 146 1,684 1,687

Recent Accounting Pronouncements Adopted

In October 2021, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2021-08, " Business Combinations (Topic 805):

1 unchanged sentence

ASU 2021-08 is effective for fiscal years beginning after December 15, 2022, with early adoption permitted.

We expect to adopt ASU 2021-08 on January 1, 2023.

Sales of Subsidiary Businesses

We adopted ASU 2021-08 on January 1, 2023.

Adoption did not have a material impact on our Consolidated Financial Statements.

Recent Accounting Pronouncements Not Yet Adopted

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures ”.

The amendments “improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.” In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements.

ASU 2023-07 is effective for calendar year-end public business entities in the 2024 annual period and in 2025 for interim periods.

Early adoption is permitted.

We expect to adopt ASU 2023-07 for 2024 annual period and 2025 interim periods, retrospectively.

We are currently evaluating the impact of this ASU on our Consolidated Financial Statements.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures , which requires that an entity, on an annual basis, disclose additional income tax information, primarily related to the rate reconciliation and income taxes paid.

The amendment in the ASU is intended to enhance the transparency and decision usefulness of income tax disclosures.

The guidance will be applied on a prospective basis with the option to apply the standard retrospectively and is effective for calendar year-end public business entities in the 2025 annual period and in 2026 for interim periods with early adoption permitted.

We are currently evaluating the impact of this ASU on our Consolidated Financial Statements.

Sales of Subsidiary Business

Sale of WegoWise

3 unchanged sentences

The gain on the sale is included within Other income, net in our Consolidated Statements of Operations.

Sale of MyCase

On September 30, 2020, we completed the sale of MyCase, Inc.

("MyCase"), a former wholly owned subsidiary that provided legal practice and case management software solutions to our legal customers, for $ 193.0 million, consisting of $ 192.2 million of cash proceeds, plus a $ 2.2 million employee retention bonus pool funded by us, less cash divested of $ 0.8 million and a preliminary working capital adjustment of $ 0.6 million (the "MyCase Transaction").

The retention bonus pool was refundable to the Company to the extent that MyCase employees were terminated prior to the retention period, which was one year from the closing date of the MyCase Transaction.

We recognized a pre-tax gain on the sale of $ 188.0 million on the MyCase Transaction, consisting of cash proceeds of $ 192.2 million, less net assets divested of $ 4.6 million, plus an adjustment in the employee retention bonus pool of $ 0.4 million.

Net assets divested is primarily comprised of capitalized software of $ 3.9 million, deferred revenue of $ 2.8 million and goodwill allocated to MyCase of $ 2.3 million.

The gain on the sale was recorded within Other income, net .

Income received during the twelve months ended December 31, 2021 and 2020 in relation to the transition services provided by us to MyCase was $ 2.4 million, and $ 1.1 million respectively, and is included within Other income, net in our Consolidated Statements of Operations.

Investment Securities and Fair Value Measurements

Investment Securities

Investment securities classified as available-for-sale consisted of the following at December 31, 2022 and 2021 (in thousands):

Investment securities classified as available-for-sale consisted of the following as of December 31, 2023 and 2022 (in thousands):

December 31, 2023

Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value

Corporate bonds $ 17,497 $ 2 $ ( 112 ) $ 17,387

Agency securities 17,507 — ( 484 ) 17,023

Treasury securities 81,605 — ( 1,557 ) 80,048

government and agency securities $ 162,062 $ 193 $ ( 59 ) $ 162,196

Total available-for-sale investment securities $ 162,062 $ 193 $ ( 59 ) $ 162,196

2 unchanged sentences

Corporate bonds $ 17,497 $ 2 $ ( 112 ) $ 17,387

Agency securities 19,753 — ( 27 ) 19,726

Treasury securities 77,108 2 ( 229 ) 76,881

government and agency securities 99,112 — ( 2,041 ) 97,071

Total available-for-sale investment securities $ 116,609 $ 2 $ ( 2,153 ) $ 114,458

11 unchanged sentences

Corporate bonds $ 3 $ — $ 1,013 $ 16,497

Agency securities — — — 2,250

Treasury securities — — — 56,635

government and agency securities — — — 135,885

$ 3 $ — $ 1,013 $ 152,382

2 unchanged sentences

Corporate bonds $ — $ ( 3 ) $ 994 $ 28,998

Agency securities — — — 11,575

Treasury securities 6 — 43,198 56,704

government and agency securities — — — 58,885

$ — $ ( 3 ) $ 994 $ 87,883

8 unchanged sentences

Money market funds $ 37,100 $ — $ 37,100

Treasury securities 1,287 — 1,287

Available-for-sale investment securities:

Corporate bonds — 17,387 17,387

Agency securities — 17,023 17,023

Treasury securities 80,048 — 80,048

government and agency securities — 162,196 162,196

Total $ 37,100 $ 162,196 $ 199,296

3 unchanged sentences

Money market funds $ 41,973 $ — $ 41,973

Treasury securities 1,287 — 1,287

Available-for-sale investment securities:

Corporate bonds — 17,387 17,387

Agency securities — 19,726 19,726

Treasury securities 76,881 — 76,881

government and agency securities 80,048 17,023 97,071

Total $ 123,308 $ 34,410 $ 157,718

3 unchanged sentences

Cash Equivalents

At December 31, 2022 and 2021, cash equivalents include cash invested in money market funds and treasury securities with a maturity of three months or less.

As of December 31, 2023 and 2022, cash equivalents include cash invested in money market funds with a maturity of three months or less.

Fair value is based on market prices for identical assets.

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Total amortization expense $ 21,562

Intangible Assets, net and Goodwill

Goodwill and Intangible Assets, Net

Intangible assets, net consisted of the following (in thousands, except years):

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Life in Years

Customer relationships $ 1,670 $ ( 1,448 ) $ 222 5.0

Database 4,710 ( 2,355 ) 2,355 10.0

Technology 6,539 ( 6,539 ) — 4.0

Trademarks and trade names 1,520 ( 1,211 ) 309 5.0

Partner relationships 680 ( 680 ) — 3.0

Non-compete agreements 7,340 ( 5,872 ) 1,468 5.0

Domain names 90 ( 88 ) 2 5.0

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Total intangible assets, net $ 22,801 $ ( 17,968 ) $ 4,833 4.7

During the year ended December 31, 2022, we divested intangible assets of $ 2.5 million as part of the WegoWise Transaction.

For additional information see Note 3, Sales of Subsidiary Businesses .

Amortization expense with respect to intangible assets totaled $ 2.5 million, $ 4.4 million and $ 4.6 million for the years ended December 31, 2023, 2022 and 2021, respectively.

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Years Ending December 31,

Thereafter 471

Total $ 2,357

Our goodwill balance is solely attributed to acquisitions.

The change in the carrying amount of goodwill during the year ended December 31, 2022 is as follows (in thousands):

The change in the carrying amount of goodwill during the years ended December 31, 2023 and 2022 is as follows (in thousands):

Goodwill at December 31, 2021 $ 56,147

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Goodwill at December 31, 2022 $ 56,060

Goodwill at December 31, 2023 $ 56,060

Accrued Employee Expenses

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Accrued bonuses 14,795 13,806

Accrued severance and related personnel cost 1,098 496

Accrued payroll and other 7,275 8,007

Total accrued employee expenses $ 35,567 $ 34,376

During the year ended December 31, 2023, we expensed and paid $ 14.9 million of severance related to separation costs associated with our former Chief Executive Officer's Transition and Separation Agreement, dated March 1, 2023 ("Separation Agreement").

In the third quarter of 2023, we accrued $ 10.3 million of severance and related personnel costs associated with our workforce reduction, which has been substantially paid out in cash during the year ended December 31, 2023.

The remaining balance is expected to be paid in 2024.

Refer to Note 16, Workforce Reduction for additional information.

Other Current Liabilities

Other Current Liabilities consisted of the following (in thousands):

Insurance reserves $ 4,174 $ 2,665

Operating lease liabilities-current 3,626 3,357

Other 3,535 2,871

Total other current liabilities $ 11,335 $ 8,893

For additional information, refer to Note 11, Commitments and Contingencies and Note 10, Leases.

Operating leases for our corporate offices have remaining lease terms ranging from five months to ten years , some of which include options to extend the leases for up to ten years .

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Lease-related assets and liabilities were as follows (in thousands, except years and %):

Prepaid expenses and other current assets $ — $ 4,854

Operating lease right-of-use assets 19,285 23,485

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Weighted-average discount rate 5.1 % 3.9 %

Future minimum lease payments under non-cancellable leases as of December 31, 2022 were as follows (in thousands):

Years ending December 31,

Thereafter 35,042

Total future minimum lease payments 65,119

imputed interest ( 11,525 )

Total $ 53,594

(1) Future minimum lease payments for the year ending December 31, 2023 are presented net of tenant improvement allowances of $ 3.5 million.

During the current year, we decided to exit and make available for sublease certain leased office spaces.

During the year ended December 31, 2022, we decided to exit and make available for sublease certain leased office spaces.

As a result, we reassessed our asset groupings and evaluated the recoverability of our right-of-use and other lease related assets, and determined that the carrying value of the respective asset groups was not fully recoverable.

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These amounts were recorded within General and administrative in our Consolidated Statements of Operations.

In January 2023, we entered into an amendment to the lease agreement for our San Diego facility (the "San Diego Lease").

We remeasured the lease liability and recorded a reduction to the lease liability and right-of-use asset using the discount rate at the modification date, which resulted in a gain of $ 2.4 million in the Consolidated Statements of Operations.

In June 2023, we entered into a second amendment to reduce the rentable square footage and our future rental payment obligations under the San Diego Lease pursuant to which we made a one-time payment of $ 2.9 million.

We again remeasured the lease liability and recorded a reduction to the lease liability using the discount rate at the modification date.

As a result, we recorded a gain of $ 1.9 million in the Consolidated Statements of Operations.

In July 2023, we entered into an agreement to sublet one of our office spaces in Santa Barbara through December 31, 2031 (the "Santa Barbara 90 Sublease").

The total rental commitment over the term of the Santa Barbara 90 Sublease is

$ 6.1 million.

We performed impairment testing in accordance with ASC 360, and no impairment related to the right-of-use assets was recorded for the year ended December 31, 2023.

Future minimum lease payments under non-cancellable leases as of December 31, 2023 were as follows (in thousands):

Years ending December 31,

Thereafter 24,373

Total future minimum lease payments 55,480

imputed interest ( 10,740 )

Total $ 44,740

Commitments and Contingencies

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Legal Proceedings

From time to time we may become involved in various legal proceedings, investigative inquiries, and other disputes arising from or related to matters incident to the ordinary course of our business activities.

We are not currently a party to any legal proceedings, nor are we aware of any pending or threatened legal proceedings, that we believe would have a material adverse effect on our business, operating results, cash flows or financial condition should such proceedings be resolved unfavorably.

On February 10, 2023, a lawsuit was filed in the First Judicial District Court of New Mexico, Murphy, et al.

AppFolio, Inc., et al.

D-101-CV-2022-02100), naming us as a defendant and alleging certain violations of the New Mexico Unfair Practices Act and negligent misrepresentation in connection with our tenant screening service (the “Murphy Litigation”).

In late November 2023, the parties agreed to settle the Murphy Litigation and plan to file a notice of settlement with the court.

We did not admit any wrongdoing in connection with the settlement of the Murphy Litigation.

We have assessed the potential liabilities related to this matter and have determined that it is probable a loss will be incurred;

however, we expect that this loss will be covered by existing insurance policies.

As of December 31, 2023, we recorded a liability of $ 7.0 million within Accrued Expenses and a corresponding receivable amount within Prepaid expenses and other current assets.

In addition to the foregoing, from time to time, we are involved in various other investigative inquiries, legal proceedings and disputes arising from or related to matters incident to the ordinary course of our business activities, including actions with respect to intellectual property, employment, labor, regulatory and contractual matters.

Although the results of such investigative inquiries, legal proceedings and other disputes cannot be predicted with certainty, we believe that we are not currently a party to any matters which, if determined adversely to us, would, individually or taken together, have a material adverse effect on our business, operating results, financial condition or cash flows.

However, regardless of the merit of any matters raised or the ultimate outcome, investigative inquiries, legal proceedings and other disputes may generally have an adverse impact on us as a result of defense and settlement costs, diversion of management resources, and other factors.

Indemnification

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Amended and Restated Certificate of Incorporation

Upon the effectiveness of our Amended and Restated Certificate of Incorporation on June 25, 2015, the number of shares of capital stock that is authorized to be issued was increased to 325,000,000 shares, of which 250,000,000 shares are Class A common stock, 50,000,000 shares are Class B common stock and 25,000,000 are undesignated preferred stock.

The Class A common stock, Class B common stock and preferred stock have a par value of $ 0.0001 per share.

Upon the effectiveness of our Amended and Restated Certificate of Incorporation on June 25, 2015, we are authorized to issue 250,000,000 shares of Class A common stock, 50,000,000 shares of Class B common stock and 25,000,000 shares of undesignated preferred stock, each with a par value of $ 0.0001 per share.

Class A Common Stock and Class B Common Stock

Except for voting rights, or as otherwise required by applicable law, the shares of our Class A common stock and Class B common stock have the same powers, preferences and rights and rank equally, share ratably and are identical in all respects as to all matters.

The rights and preferences are as follows:

Dividend Rights .

Subject to preferences that may apply to any shares of preferred stock outstanding at the time, the holders of outstanding shares of our Class A common stock and Class B common stock are entitled to receive dividends out of funds legally available at the times and in the amounts that our Board of Directors may determine.

Voting Rights .

The holders of our Class A common stock are entitled to one vote per share, and holders of our Class B common stock are entitled to 10 votes per share.

The holders of our Class A common stock and Class B common stock will vote together as a single class on all matters submitted to a vote of our stockholders, unless otherwise required by Delaware law or our amended and restated certificate of incorporation.

Delaware law could require either holders of our Class A common stock or holders of our Class B common stock to vote separately.

In addition, our amended and restated certificate of incorporation requires the approval of the holders of at least a majority of the outstanding shares of our Class B common stock, voting as a separate class to approve a change-in-control transaction.

Each share of our Class B common stock is convertible at any time at the option of the holder into one share of our Class A common stock.

In addition, each share of our Class B common stock will convert into one share of our Class A common stock upon any transfer, whether or not for value, except for certain transfers described in our amended and restated certificate of incorporation, including, without limitation, (i) a transfer by a partnership or limited liability company that was a registered holder of our Class B common stock at the “effective time,” as defined in our amended and restated certificate of incorporation, to a partner or member thereof at the effective time or (ii) a transfer to a “qualified recipient,” as defined in our amended and restated certificate of incorporation.

All the outstanding shares of our Class B common stock will convert automatically into shares of our Class A common stock upon the date when the number of outstanding shares of our Class B common stock represents less than 10 % of all outstanding shares of our Class A common stock and Class B common stock.

Once converted into our Class A common stock, our Class B common stock may not be reissued.

Right to Receive Liquidation Distributions .

Upon our dissolution, liquidation or winding-up, the assets legally available for distribution to our stockholders are distributable ratably among the holders of our Class A common stock and Class B common stock, subject to prior satisfaction of all outstanding debt and liabilities and the preferential rights and payment of liquidation preferences, if any, on any outstanding shares of preferred stock.

Holders of our Class A common stock and Class B common stock are entitled to dividends when, as, and if declared by our board of directors, subject to the rights of the holders of all classes of stock outstanding having priority rights to dividends.

As of December 31, 2023, we have not declared any dividends.

The holder of each share of Class A common stock is entitled to one vote, while the holder of each share of Class B common stock is entitled to ten votes.

Each share of our Class B common stock is convertible at any time at the option of the holder into one share of our Class A common stock and generally convert into shares of our Class A common stock upon transfer.

Class A common stock and Class B common stock are collectively referred to as common stock throughout the notes to these financial statements, unless otherwise noted.

Preferred Stock

Our Board of Directors is authorized, subject to limitations prescribed by Delaware law, to issue up to 25,000,000 shares of our preferred stock in one or more series, to establish from time to time the number of shares to be included in each series, and to fix the designation, powers, preferences and rights of the shares of each series and any of its qualifications, limitations or restrictions, in each case without further action by our stockholders.

The number of authorized shares of any series of preferred stock may be increased or decreased, but not below the number of shares of that series then outstanding, by the affirmative vote of the holders of a majority of the voting power of our outstanding capital stock entitled to vote thereon, or such other vote as may be required by the certificate of designation establishing the series.

Our Board of Directors, subject to the limitations prescribed by Delaware law, has the authority to issue up to 25,000,000 shares of preferred stock and to determine the price, rights, preferences, privileges and restrictions, including voting rights, of those shares without any further vote or action by the stockholders.

Share Repurchase Program

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The Share Repurchase Program does not obligate us to repurchase any specific dollar amount or number of shares, there is no expiration date for the Share Repurchase Program, which may be modified, suspended or terminated at any time and for any reason.

During the year ended December 31, 2020, we repurchased a total of 48,002 shares of our Class A common stock through open market repurchases, and recorded a $ 4.2 million reduction to stockholders' equity, which includes broker commissions.

We have not made any other repurchases under the Share Repurchase Program.

We have not made any repurchases under the Share Repurchase Program during the years ended December 31, 2023, 2022 and 2021.

Stock-Based Compensation

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On January 1 of each subsequent calendar year, the number of shares available for grant and issuance under the 2015 Plan increase by the lesser of (i) the number of shares of our Class A common stock subject to awards granted under the 2015 Plan during the preceding calendar year and (ii) such lesser number of shares of our Class A common stock determined by our Board of Directors.

At December 31, 2022, we have reserved an aggregate of 4,450,726 shares of our Class A common stock for grant and issuance under the 2015 Plan.

The number of shares of our Class A common stock is also subject to adjustment in the event of a recapitalization, stock split, reclassification, stock dividend or other change in our capitalization.

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Options outstanding as of December 31, 2022 516 $ 12.90 2.7

Options granted 120 129.74

Options exercised ( 255 ) 10.18

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Our stock-based compensation expense for stock options were not material for the periods presented.

During the year ended December 31, 2023, we granted our Chief Executive Officer 120,000 stock options of our Class A common stock.

These stock options vest based on service conditions with one-third vesting at the end of each of the years ending December 31, 2025, 2026 and 2027.

No stock options were granted during the years ended December 31, 2022 or 2021.

The fair value of stock options granted is estimated on the date of grant using the Black-Scholes option-pricing model.

The following table summarizes information relating to our stock options granted during the year ended December 31, 2023:

Weighted average grant-date fair value per share $ 67.23

Weighted average Black-Scholes model assumptions:

Risk-free interest rate 4.06 %

Expected term (in years) 6.92

Expected volatility 44 %

Expected dividend yield —

The total intrinsic value of options exercised in 2023, 2022 and 2021 was $ 36.4 million, $ 31.1 million, and $ 39.1 million, respectively.

This intrinsic value represents the difference between the fair value of our common stock on the date of exercise and the exercise price of each option.

Based on the fair value of our common stock at December 31, 2022, the total intrinsic value of all outstanding options, exercisable options, and options vested and expected to vest was $ 47.7 million.

Based on the fair value of our common stock as of December 31, 2023, the total intrinsic value of all outstanding options, exercisable options, and options vested and expected to vest was $ 46.4 million.

Restricted Stock Units

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The actual number of shares to be issued at the end of the performance period will range from 0 % to 142 % of the target number of shares depending on achievement relative to the performance metric over the applicable period.

The remaining 0.1 million PSUs unvested as of December 31, 2022 are subject to vesting based on the achievement of pre-established performance metrics for the years ending December 31, 2022 and 2023, assuming continued employment throughout the performance period.

The actual number of shares to be issued at the end of the performance period will range from 0 % to 100 % of the initial target awards.

Achievement of the performance metric between 100 % and 150 % of the performance target will result in a performance-based cash bonus payment between 0 % and 65 % of the initial target awards.

We recognized stock-based compensation expense for the RSUs and PSUs of $ 51.0 million, $ 43.3 million and $ 17.3 million for the years ended December 31, 2023, 2022 and 2021, respectively.

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As of December 31, 2023, the total estimated remaining stock-based compensation expense for unvested restricted stock awards with a repurchase right was $ 0.3 million, which is expected to be recognized over a weighted average period of 0.5 years.

The effective tax rate as compared to the U.S.

federal statutory rate of 21 % differs primarily due to change in valuation allowance against deferred taxes and non-deductible expenses, partially offset by state income taxes and tax benefits associated with stock-based compensation expense and research and development tax credits.

Set forth below is a reconciliation of the components that caused our provision for income taxes to differ from amounts computed by applying the United States federal statutory rate:

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State and local income taxes, net of federal benefit ( 44 ) 9 ( 214 )

Change in valuation allowance 215 ( 37 ) 795

Stock-based compensation expense ( 108 ) 7 ( 426 )

Research and development tax credits ( 93 ) 5 ( 205 )

Non-deductible officers' compensation 79 ( 6 ) 47

Meals and entertainment — 3 —

Change in valuation allowance ( 37 ) 795 —

Other permanent differences ( 4 ) ( 1 ) 23

Research and development tax credits 5 ( 205 ) ( 2 )

Provision for income taxes 66 % ( 2 ) % 41 %

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Deferred income tax assets:

Net operating loss carryforwards $ 5,802 $ 10,849

Research and development tax credits $ 19,513 $ 18,558

Capitalized research and software costs 33,958 14,706

Stock-based compensation 5,105 3,965

Lease liability 11,914 14,260

Net operating loss carryforwards 6,502 5,802

Stock-based compensation 2,894 5,105

Other 3,303 3,614

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Deferred tax liabilities:

Capitalized research and software costs — ( 9,972 )

Lease asset ( 5,135 ) ( 6,249 )

Property and equipment ( 4,189 ) ( 4,914 )

Intangible assets ( 940 ) ( 1,558 )

Capitalized commissions ( 4,237 ) ( 4,217 )

Lease asset ( 6,249 ) ( 11,056 )

Intangible assets ( 329 ) ( 940 )

Other ( 2,511 ) ( 2,634 )

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Total net deferred tax liabilities $ ( 697 ) $ ( 685 )

At December 31, 2022, we had state net operating loss carryforwards $ 66.0 million.

As of December 31, 2023, we had state net operating loss carryforwards $ 75.1 million.

The state net operating losses will begin to expire in 2028.

At December 31, 2022, we also had federal and state research and development credit carryforwards of $ 8.7 million and $ 19.3 million, respectively.

The federal credit carryforwards will begin to expire in 2040, while the state credit carryforwards apply indefinitely.

As of December 31, 2023, we also had federal and state research and development credit carryforwards of $ 7.5 million and $ 24.3 million, respectively.

The federal credit carryforwards will begin to expire in 2043,

while the state credit carryforwards apply indefinitely.

Utilization of our net operating loss and credit carryforwards may be subject to annual limitation due to the ownership change limitations provided by the Internal Revenue Code and similar state provisions.

We have undertaken an analysis and have determined that there are no limitations on the tax attributes at December 31, 2022.

The change in the valuation allowance are as follows (in thousands):

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The unrecognized tax benefits are recorded as a reduction to the deferred tax assets and liabilities.

At December 31, 2022 and 2021, we had no accrued interest and penalties related to uncertain income tax positions.

As of December 31, 2023 and 2022, we had no accrued interest and penalties related to uncertain income tax positions.

We do not anticipate that the amount of unrecognized tax benefits will significantly increase or decrease within the next twelve months.

We are subject to taxation in the United States and various states.

Due to the net operating loss carryforwards, our federal and state returns are open to examination by the Internal Revenue Service and state jurisdictions for all years since inception.

We file income tax returns in the U.S.

federal jurisdiction and various state and local jurisdictions.

While the applicable statute of limitations are generally open for three to four years for the jurisdictions we file in, we remain subject to income tax examinations for all years due to the usage of carryforward attributes, such as net operating losses and research and development credits.

As of December 31, 2023, we have not been notified for audit by the Internal Revenue Service or any significant state jurisdiction.

Revenue and Other Information

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All of our property and equipment is located in the United States.

Workforce Reduction

During the year ended December 31, 2023, we implemented a plan to reduce our workforce by 149 employees in order to scale the business more efficiently.

Impacted employees were notified in August 2023.

There were no workforce reductions during the years ended December 31, 2022 and 2021.

The following table presents the total severance and related personnel costs by function, for the year ended December 31, 2023 (in thousands):

Severance and Related Personnel Cost

Cost of revenue $ 2,367

Sales and marketing 3,795

Research and product development 3,407

General and administrative 2,514

(1) Total severance and related personnel costs include $ 1.8 million of accelerated stock-based compensation expense recognized during the year ended December 31, 2023.

The following is a summary of changes in the accrued severance and related personnel cost, within Accrued Employee Expenses on the Consolidated Balance Sheets (in thousands):

Accrued Severance and Related Personnel Cost

Balance as of December 31, 2022 $ —

Severance and related personnel cost 10,278

Cash Payments ( 9,425 )

Balance as of December 31, 2023 $ 853

The remaining balance is expected to be paid in 2024.

Retirement Plans

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data