Good afternoon. My name is Christine, and I'll be your conference operator today. At this time, I would like to welcome everyone to the AppFolio, Inc. Announces Second Quarter 2019 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. [Operator Instructions] Thank you.

Erica Abrams, you may begin your conference..

Thank you, Christine. Good afternoon, ladies and gentlemen. Thank you for joining us today as we report AppFolio's second quarter 2019 financial results. I am joined today by Jason Randall and Ida Kane of AppFolio to discuss these results. This call is simultaneously being 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 detail 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.

Ida, please go ahead..

Total cost and operating expenses for the second quarter increased 54% year-over-year on a GAAP basis compared to an overall 35% increase in total revenue. Our year-over-year increase in cost primarily related to our 49% growth in headcount to support an expanding base of existing customers and our growth initiatives.

We released our valuation allowance against our deferred tax assets during the second quarter, which is the primary factor in our income tax benefit of $21.3 million. Our balance sheet at June 30th reflects a $21.7 million deferred tax asset, which we believe we can use to offset future tax expenses.

Also on the balance sheet, we closed the quarter with approximately $42.5 million in cash, cash equivalents and investment securities and $49.4 million of debt. We generated $11.5 million from operating activities, used $1.4 million to purchase property and equipment and invested $4.8 million in additional product innovation via capitalized software.

We did not initiate any stock repurchases during the second quarter. Given our performance to-date, we now expect full year 2019 revenue in the range of $253 million to $255 million, which represents year-over-year revenue growth of 34% at the midpoint.

We continue to expect our weighted average diluted shares for the full year to be approximately 36 million. As a reminder, investors are invited to submit questions via the Investor Q&A form located on the Investor Overview section of our website. With that, I'll turn the call over to Jason for some additional comments..

One acknowledging AppFolio Property Manager Plus as best new products; and the second recognizing our customer-first approach with a Gold Stevie for Best Customer Service, both in real estate, Construction Management Solution category.

Looking ahead, we remain focused on our -- executing our long-term strategy of sustainable growth, while delivering exceptional customer experiences, leading technology and unsurpassed customer service. Thank you for joining us and that concludes our call for today..

Please note, a copy of the recording will be available as of Monday, July 29, 2019, at 7:30 PM Eastern. You may access the recording by dialing 1-800-859-2056 and entering 7094869. This concludes today's conference call. You may now disconnect..