RealPage touts its software as a real asset to real estate managers. The company's on-demand software platform is designed to make the property management process more efficient, enabling owners and managers of single- and multifamily rental properties to oversee their accounting, leasing, marketing, pricing, and screening operations from a single, shared database. The centralized system helps with managing incoming and outgoing residents and overseeing property functions, from hiring plumbers to training staff. Its customers include all of the top 10 largest multifamily property management companies in the US.
RealPage went public in August 2010 with an offering valued at about $135 million. (The company sold 12.3 million shares at $11 each, vs. a prior estimate of 13.5 million shares at $13 to $15 each.) The firm used the proceeds from its IPO to pay dividends, repay debt, and possibly to fund future acquisitions.
RealPage's on-demand software (95% of sales) is its primary revenue segment and consists of an integrated software platform that provides a single point of access containing data on residents, prospects, and properties. The software is generally licensed under one-year customer subscription agreements. A smaller portion of the company's revenue is generated from professional services, which include consulting, training, and implementation services.
Sales and Marketing
RealPage sells its software and services through an in-house direct sales organization. The firm promotes its products via online marketing activities, including email campaigns, online advertising, Web campaigns, webinars, and social media (blogging, Facebook, and Twitter). Advertising cost totaled $10.2 million in 2012, vs. $8.6 million in 2011.
In 2012 more than 8,400 customers used one of more of the company's on-demand software products to help manage the operations of some 8.1 million rental housing units.
The company's sales increased 25% in 2012 vs. 2011, driven by a 28% gain in sales of its on-demand software products. RealPage returned to profitability in 2012 with net income of $5.2 million vs. a loss of $1.2 million in 2011. Cash flow from operations continued its steep climb in 2012, exceeding $58 million.
To fuel its expansion, acquisitive RealPage has completed 21 acquisitions since mid-2002. The company's active acquisition schedule has allowed it to expand its platform, enter new rental property markets, and expand its customers base.
Mergers and Acquisitions
Recent purchases include Software-as-a-Service (SaaS) provider Vigilan, which serves the assisted living industry, in 2012. The company's products enable customers to manage care information, labor costs, billing, and compliance, boosting RealPage's on-demand software offerings in that market. Also that year the company paid $6 million to buy RentMineOnline, which provides SaaS marketing driven by social sites, such as Facebook and LinkedIn, for the multifamily rental industry.
In 2011 Compliance Depot, a provider of risk management and compliance services for the real estate industry in 2011. The deal continued the company's strategy of expanding its portfolio of products and services for the rental housing market. That year, it also paid $4.5 million in cash for SeniorLiving.net, a Web-based lead generation and placement service for the senior housing market. In a related move in 2011, RealPage acquired Multifamily Technology Solutions, which operates the MyNewPlace website. Both the SeniorLiving.net and MyNewPlace acquisitions boost RealPage's origination and syndication operations.
Chairman and CEO Stephen Winn owns about 37% of the company's shares. Apax Excelsior VI owns about 11%.
RealPage was formed in 1998 to acquire Rent Roll, Inc., which marketed and sold on-premise property management systems for certain multifamily housing markets. Three years later, it released OneSite, its first on-demand property management system.