In this expanded role, Chris will continue to lead our value-added services as well as unlock future growth with new initiatives focused on the resident experience, which is an industry segment, we’re excited to be investing in. Through leading — industry-leading innovation and exceptional service, AppFolio is paving the way to power an entire industry. We will continue to leverage our expertise and customer networks to increase our innovation velocity, drive profitable growth and enhance the lives of the customers and communities we serve. I’ll now turn the call over to Fay Sien for more details on AppFolio’s first quarter financial results.
Fay Sien Goon : Thank you, Shane. We are pleased with our continued strong growth in revenue and increase in profitability. The financial results reflect the execution of our strategy focused on delivering profitable growth. In the first quarter, we delivered revenue of $187 million, growing 38% year-over-year. Non-GAAP operating margin expanded to 25.7% from negative 1.6% last year, and we generated free cash flow margin of 21.9% compared to negative 0.3% in the same period of last year. At the end of the quarter, we managed approximately 8.3 million units from 19,941 customers compared to 7.5 million units from 18,834 customers a year earlier, representing a 6% increase in customers and 11% increase in ending units. As Shane discussed, property managers are improving their operational efficiency through greater use and adoption of our value-added services, such as FolioGuard, payments and screening.
First quarter revenue from value-added services grew 47% year-over-year to $142 million and growth primarily resulted from our decision to stop waiving our eCheck fees, and higher resident adoption of online payments as transaction volume and card usage increased. Turning to spending. We exited the quarter with 1,497 employees, which is down slightly from the prior quarter. On a sequential basis, we strategically added headcount in key growth areas to better enable us to deliver innovation and unlock upmarket customers. Meanwhile, we optimized our workforce in other parts of the business to streamline processes and enhance the customer experience. Cost of revenue exclusive of depreciation and amortization was 34% of total revenue compared to 41% in the first quarter of last year.
The decrease was primarily, due to eCheck fees and internal operational improvements. As a percent of revenue, combined sales and marketing R&D and G&A 12% to 38% from 56% in the same period of last year due to growth in revenue and a collective focus on operational efficiency. Sales and marketing expenses, as a percentage of revenue decreased from 20% in the first quarter of last year to 12% this quarter. On a sequential basis, we strategically increased our investment in sales and marketing initiatives to better enable us to win our market. By optimizing operations and maintaining discipline in our investments, we improved R&D expenses as a percentage of revenue from 24% in the same quarter of last year to 17% this quarter. Our G&A expenses as a percentage of revenue, decreased from 13% in the same quarter of last year to 8% this quarter.
Overall, non-GAAP operating margin grew to 25.7% compared to negative 1.6% in the same quarter of last year. Free cash flow margin this quarter was 21.9% compared to negative 0.3% in the same quarter of last year. We are raising our projected full year revenue guidance to $766 million to $774 million, which implies an annual growth rate of 24%, based on the midpoint outreach. Our updated guidance reflects our expectations for continued customer upgrades to premium product tiers and growing usage and adoption of our value-added services. Our guidance also factors in a modest increase in card adoption and reduced transaction fees associated, with card-based payments. Cost of revenue exclusive of depreciation and amortization is expected to decrease slightly from prior year, as a percentage of revenue due to eChecks fees, product mix and operational efficiencies.
We are raising our guidance for the full year non-GAAP operating margin to 23% to 24% and raising our guidance on our free cash flow margin to 21% to 23%. This reflects our planned investment in high priority initiatives that enable us to achieve our strategic objectives. Diluted weighted average shares outstanding are expected to be approximately 37 million shares for the full year. Our first quarter was a good kickoff to 2024, with strong growth in revenue and profitability. All while we continue our industry-leading innovation and exceptional service. We are delivering on our long-term strategy of acquiring and retaining happy customers and driving growth in units, revenue and profits. Thank you all for joining us today. We look forward to seeing you soon.
Operator, this concludes today’s call.
Operator: Thank you for your participation in today’s conference. This does conclude the program. You may now disconnect. Everyone, have a great day.
End of Q&A:
