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Thank you for joining us today. Welcome to the AppFolio, Fourth Quarter and Fiscal Year 2019 Financial Results Conference Call.
I would now like to turn the call over to Erica Abrams. Thank you.
Thank you, Christine. Good afternoon ladies and gentlemen. Thank you for joining us today as we report AppFolio's fourth quarter and fiscal year 2019 financial results. I'm joined today by Jason Randall and Ida Kane of AppFolio to discuss these results. This call is being simultaneously webcast on the Investor Relations section of our website at www.appfolioinc.com.
Before we get started, I would like to call everyone's attention to our safe harbor policy. Please note that certain statements made on this call will be forward-looking statements, which are subject to considerable risks and uncertainties. Actual results or performance may be materially different from any results or performance expressed or implied by the forward-looking statements.
Forward-looking statements may relate to future plans and financial conditions, results of operations, business forecasts and plans, strategic plans and objectives and product development plans. Please see our filings with the SEC for greater details about risks and uncertainties.
Forward-looking statements are based on assumptions as of today and we assume no obligation to update any forward-looking statements after today, even if new information becomes available in the future.
With that, I'll turn the call over to Ida. Please go ahead.
Thank you, Erica, and welcome to everyone joining us on the call today for our AppFolio’s fourth quarter and fiscal year 2019 financial results. We had a strong fiscal year 2019, with full year revenue of $256 million, a 35% increase year-over-year. GAAP net income was $36.3 million or $1.02 per diluted share compared to $20 million or $0.56 per diluted share reported in fiscal 2018.
Fiscal year 2019 net income results included $31.5 million tax benefit, primarily related to the release of our valuation allowance against deferred tax assets. Also included in fiscal year 2019 results are $7.3 million of non-cash charges related to stock based compensation. For those of you who track non-GAAP results, our form 10-K was filed today and includes more detailed financial data points that you might find helpful in calculating any relevant non-GAAP results on your own.
We ended fiscal year 2019 with 14,385 real-estate Property Manager Customers, managing an aggregate of 4.64 million units in their portfolios, compared to 13,046 customers and 3.9 million units under management reported one year ago. The year-over-year increase in the average size of net new customer acquired is a result of our continued efforts and success acquiring customers with higher unit counts under management.
As a reminder, we define a real-estate Property Manager Customer base as the number of customers subscribing to our core solutions. These customers are using AppFolio Property Manager or AppFolio Property Manager PLUS to manage and grow their businesses.
In the legal vertical, we closed the year with 10,971 customers up from 10,279 one year ago. As of December 31, 2019 our annual dollar base net expansion was 118% for our Property Manager customers and 121% for our law firm customers. This compares to 116% and 113% respectively in fiscal year 2018. I encourage you to read our 8-K filing today for more information on how we calculate annual dollar based net expansion.
Turning to our most recent quarter, total revenue for the fourth quarter increased 34% over the same period one year ago to $67.4 million. GAAP-net income was $4.4 million or $0.12 per diluted share, which includes a $4.6 million income tax benefit.
Core solutions revenue in the fourth quarter was $23.6 million, a 22% increase year-over-year, primarily due to a 19% increase in Property Manager units under management and a 10% increase in the number of Property Manager customers.
Fourth quarter value plus services revenue was $39.6 million, a 37% increase year-over-year. Revenue from each of our value plus services increased year-over-year. The majority of growth in this area continues to be driven by increased usage of our electronic payments, screening and insurance services by a larger base of Property Manager Customers, as well as a higher number of units under management.
Other revenue was $4.1 million in the fourth quarter, primarily related to revenue generated from customer subscriptions for our standalone services we offer, as well as fees associated with our Property Manager Customers upgrading to a new website hosting as we discussed last quarter.
Turning to expenses, total costs and operating expenses for the fourth quarter increased 41% year-over-year, compared to an overall 34% increase in total revenue. The year-over-year increase in costs is primarily related to a 38% growth in headcount to support growth areas that we believe will positively impact long term shareholder value.
These include investments in our AppFolio Property Manager PLUS offering that service larger, more complex real estate Property Manager Customers, and AppFolio Investment Management which service real-estate Investment Managers. Jason will speak more to our additional investment areas shortly.
Moving to our balance sheet, we closed the quarter with approximately $50.8 million in cash, cash equivalents and investment securities and $48.8 million of debt. During the fourth quarter of 2019 we signed new long-term leases for the majority of our existing Santa Barbara campus in connection with the change in ownership of the building. At year end we have approximately $31 million recorded in assets and $36 million in lease liabilities on our balance sheets related to these places.
For the fiscal year, we generated $38.9 million from operating activities. Our primary uses of cash were $54 million for the acquisition of Dynasty, $21 million in capitalized software development costs and $8.1 million for the purchase of property and equipment in connection with our expanding offices and employee base. We did not initiate any stock repurchases during fiscal year 2019 against our authorized share repurchase program of $100 million.
As we look to fiscal 2020, we remain enthusiastic about our business, our investments and growth drivers over the long term. For full year fiscal 2020, we expect revenue to be in the range of $312 million to $320 million, which represents growth in the range of 22% to 25%. We continue to expect our weighted average diluted share count for the year to be approximately 36 million shares.
That concludes my prepared remarks. With that, I'll turn the call over to Jason for additional comments.
Thanks Ida. Thank you for joining us today as we report our fourth quarter and fiscal year 2019 financial results. Our financial results in 2019 reflect our continued focus and success with revolutionizing vertical industry businesses, by providing great software and service to our customers. We attribute our progress to our steadfast focus on innovating for our customers and their stakeholders, delivering an exceptional customer experience and enabling a thriving company culture, all while focusing on long term sustainable growth in our business.
In our real-estate vertical we took important steps to advance our business, both through acquisition and internal development that continue to position AppFolio for long term success. We made important improvements in AppFolio Property Manager PLUS, APM PLUS, a peer of our award winning software, designed for managing larger businesses with more complex needs.
Our focus here was to continue to improve business efficiency, help mitigate risk and provide deeper business insights to our customers at scale. We extended innovative capabilities such as configurable workflows, provide more flexibility in automation for customers who manage large, dispersed teams with more complex property portfolios.
We also provide customers with an auditing center for greater management oversight of employees’ actions across the platform. The result of our continued focus on improving functionality of APM PLUS is growing adoption and favorable reviews and feedback from customers and prospects.
As many of you know, in early 2019 we acquired Dynasty marketplace and quickly released AppFolio AI leasing assistant Lisa, as a value plus service offering. From here we continue to incorporate AI technology into our products to improve our customer’s businesses.
We developed and released Smart Bill Entry, a feature now included in our core AppFolio Property Manager offering. This feature harnesses the power of AI by bring up hours of invoice entry through automation. We believe that artificial intelligence is a powerful technology that will enable us to further revolutionize the real estate industry well into the future.
Also in early 2019 we launched AppFolio Utility Management, a value plus offering that provides larger portfolio owners and managers the information they need to more cost efficiently manage water, energy, gas and oil use. This technology was based on the legalized acquisition in September 2018.
In other product areas we continued our investment in serving larger community association managers with improvements to features such as Board Member tracking and Management and enable community association managers to further streamline their processes and boost efficiencies through automation and enhanced Board communication.
In early 2019 we launched AppFolio Investment Management, an offering designed for real-estate investment managers. AppFolio Investment Management empowers real-estate investment managers with a modern solution to better serve their investors by streamlining fundraising, reporting and communication.
This offering is designed to provide increased transparency and personalized self-service experience for real estate investors, while providing flexible tools for investment managers. In Q4, 2019 we enhanced reporting capabilities for customers by automatically calculating key performance metrics, along with providing new ways for investors to visualize the performance of their investments in the AppFolio Investor portal.
Brooke Herman, Controller of Pacific Apartment Homes and AppFolio Property Manager Customer and an early adopter of AppFolio Investment Management recently said, since using AppFolio Investment Management, our investors have been ecstatic to have all their information in one place where they can log in to see every single investment and click into individual distributions. We will continue to invest in innovation that extends our ability to serve growing segment of the real estate market.
Turning to our legal vertical, throughout 2019 we remained focused on helping law firms improve business performance and better serve the modern and legal client. To that end we added capabilities that allow customers to measure marketing performance, and introduce business management dashboards that provide case and financial insights to help firms make better decisions.
We also continue to add new features to improve the efficiency of managing cases, including e-signature and text messaging. And finally, to enable law firms to collect more of their outstanding balances, we continue to enhance the payments offering with the addition of new payment methods and automated payment plans.
During 2019 AppFolio continued to gain industry recognition for company, culture, growth and innovative technology. In the fourth quarter, AppFolio was honored for our strong culture, with a Glassdoor Employers Choice Award recognizing the 100 best places to work in 2020, an award that relies solely on the input of current and former employees. At AppFolio we believe that focusing on the employee experience, and building a strong culture that fosters innovation, results in excellent customer experience.
As you may know from our press release and 8-K filed today, Klaus Schauser will retire as Chief Strategist for AppFolio effective May 1 and continue on AppFolio’s Board of Directors. Klaus and Jon Walker co-founded AppFolio in 2006 and have been influential leaders and strategists within AppFolio. Klaus has been a driving force in the development of our company's vision strategy and culture. His contributions are deeply embedded throughout AppFolio.
As he did in his active work years, I expect Klaus will work closely with our business to transition into retirement and continue as a passionate and active member of AppFolio’s Board. We are excited for Klaus to begin this next chapter in his life and thank him for his vision and leadership of AppFolio.
In summary, we remain focused on areas that enable long term sustainable growth for our business. We expect to accomplish this by delivering innovative technology solutions that create modern and exceptional experiences for our customers, all fueled by an engaged and happy team.
Thank you for joining us, and that concludes our call for today.
[No Q&A Session for this event]
Thank you for participating in today's AppFolio fourth quarter 2019 financial results conference call. This call will be available for replay beginning at 7:30 PM eastern today, through 11:59 PM eastern on March 5, 2020. The conference ID for replay is 586-99-59. Again, the conference ID number for the replay is 586-99-59. The number to dial for replay is 1-800-585-8367.
This concludes today's call. You may now disconnect.