Home IT Industry Jamf Announces Second Quarter 2020 Financial Results

Jamf Announces Second Quarter 2020 Financial Results

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  • Q2 total revenue grew 29% year-over-year to $62.2 million
  • Recurring revenue grew 42% year-over-year to $58.7 million
  • ARR grew 36% year-over-year to $241 million

MINNEAPOLIS, Sept. 01, 2020 (GLOBE NEWSWIRE) — Jamf (NASDAQ: JAMF), the standard in Apple Enterprise Management, today announced financial results for its second quarter ended June 30, 2020.

Financial Highlights for the Second Quarter 2020:

  • ARR: ARR increased 36% year-over-year to $241 million as of June 30, 2020.
  • Revenue: Total revenue was $62.2 million, an increase of 29% year-over-year. Recurring revenue was $58.7 million, an increase of 42% year-over-year.
  • Gross Profit: GAAP gross profit was $48.6 million, or 78% of total revenue, compared to $34.8 million, or 72% of total revenue, in the second quarter of 2019. Non-GAAP gross profit was $51.3 million, or 82% of total revenue, compared to $37.4 million, or 77% of total revenue, in the second quarter of 2019. 
  • Operating Loss/Income: GAAP operating income was $4.2 million, or 6.8% of total revenue, compared to GAAP operating loss of $4.4 million in the second quarter of 2019. Non-GAAP operating income was $11.2 million, or 18.0% of total revenue, compared to $4.4 million in the second quarter of 2019, or 9.0% of total revenue.
  • Cash Flow: Cash flow provided by operations was $16.8 million, compared to negative $1.9 million used in the second quarter of 2019. Unlevered free cash flow was $21.0 million, or 33.8% of total revenue, compared to $1.8 million in the second quarter of 2019, or 3.8% of total revenue.

A reconciliation between historical GAAP and non-GAAP information is contained in the tables below and the section titled “Non-GAAP Financial Measures” below contains reconciliations of these non-GAAP financial measures.

“We delivered strong second quarter results driven by the essential role we play in deploying, managing and securing Apple in the enterprise, education and healthcare,” said Dean Hager, CEO of Jamf. “We experienced strength across our key metrics, including ARR which grew 36% year-over-year, and which we believe provides the best representation of the underlying growth of our business. The extraordinary challenges resulting from COVID-19 have accelerated remote work, distance learning and telehealth trends, and have continued demand for our platform which enables businesses, hospitals and schools to connect, manage and protect their Apple devices remotely. We are excited about the multiple growth drivers for the business and the large and growing market opportunity ahead of us. We look forward to continuing to help organizations successfully deploy Apple devices seamlessly and securely across their organizations.”

Recent Business Highlights:

  • Completed its initial public offering and began trading on Nasdaq on July 22, 2020. Net proceeds from the IPO were approximately $319 million, after underwriting discounts and estimated offering expenses. On July 27th, we paid down debt and related interest and penalties of approximately $210.4 million.
  • Grew the number of devices running Jamf to 17.2 million in the second quarter, representing 19% growth over the same period last year.
  • Introduced macOS malware prevention and unified log forwarding to help organizations keep users, devices and company data secure and compliant. These new capabilities added to Jamf Protect give enterprise security teams extended visibility into their macOS fleet and the ability to prevent, respond and block identified threats. 
  • Introduced Virtual Visits, a new, patent pending telehealth workflow to protect healthcare providers while still enabling quality care and providing connectivity to patients. With Virtual Visits powered by Jamf, healthcare organizations can configure and instantly deploy third-party conferencing platforms like Cisco Webex, Zoom and Microsoft Teams to iPad or iPhone. Providers are able to easily virtually round to their patients, and patients can simply connect with loved ones outside the hospital – without IT ever having to touch the device.
  • Announced Learn Anywhere, a complete Apple education solution for schools, teachers and students looking to communicate, use engaging resources and assess learning objectives from any environment.

Financial Outlook:

For the third quarter of 2020, the company currently expects:

  • Total revenue of $65 to $66 million
  • Non-GAAP operating income of $5 to $7 million

For the full year 2020, the company currently expects:

  • Total revenue of $255 to $257 million
  • Non-GAAP operating income of $20 to $23 million

Conference Call Information:

Jamf will host a conference call and live webcast for analysts and investors at 3:30 p.m Central Time (4:30 p.m. Eastern Time) on September 1, 2020. The news release with the financial results will be accessible from the company’s website prior to the conference call.  Parties in the United States and Canada can access the call by dialing +1 (833) 519-1319, and international parties can access the call by dialing +1 (914) 800-3885.

The webcast will be accessible on Jamf’s investor relations website at https://ir.jamf.com. A telephonic replay of the conference call will be available through Tuesday, September 8, 2020. To access the replay, parties should dial (855) 859-2056, or (404) 537-3406 and enter the passcode 9599614#.

Non-GAAP Financial Measures:

In addition to our results determined in accordance with generally accepted accounting principles in the United States (“GAAP”), we believe the non‑GAAP measures of Non-GAAP Operating Expenses, Non-GAAP Gross Profit, Non-GAAP Gross Profit Margin, Non‑GAAP Operating Income, Non‑GAAP Operating Income Margin, Unlevered Free Cash Flow and Unlevered Free Cash Flow Margin are useful in evaluating our operating performance. Certain of these non-GAAP measures exclude stock-based compensation, depreciation and amortization expense, acquisition-related expenses, acquisition‑related earnout, foreign currency transaction loss and discrete tax items. We believe that non‑GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance and assists in comparisons with other companies, some of which use similar non‑GAAP information to supplement their GAAP results. The non‑GAAP financial information is presented for supplemental informational purposes only, and should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from similarly‑titled non‑GAAP measures used by other companies. Reconciliation tables of the most comparable GAAP financial measures to the non-GAAP financial measures used in this press release are included with the financial tables at the end of this release. Jamf is not providing a quantitative reconciliation of forward-looking guidance of non-GAAP operating income to its most directly comparable GAAP measure because certain items are out of Jamf’s control or cannot be reasonably predicted. Historically, these items have included, but are not limited to, acquisition-related expenses and acquisition-related earn-out. These items are uncertain, depend on various factors, and could have a material impact on U.S. GAAP reported results for the guidance period. Accordingly, a reconciliation for forward-looking non-GAAP operating income is not available without unreasonable effort. However, for the third quarter of 2020 and full year 2020 amortization is expected to be $8.3 million and $33.3 million, respectively. In addition, for the third quarter of 2020 and full year 2020 stock-based compensation is expected to be $2.3 million and $6.7 million, respectively.

Forward-Looking Statements:

This press release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding our financial outlook and market positioning. Forward-looking statements give our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “anticipate”, “estimate”, “expect”, “project”, “plan”, “intend”, “believe”, “may”, “will”, “should”, “can have”, “likely” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. All forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that we expected, including: the impact on our operations and financial condition from the effects of the current COVID-19 pandemic; the potential impact of customer dissatisfaction with Apple or other negative events affecting Apple services and devices, and failure of enterprises to adopt Apple products; the potentially adverse impact of changes in features and functionality by Apple on our engineering focus or product development efforts; changes in our continued relationship with Apple; the fact that we are not party to any exclusive agreements or arrangements with Apple; our reliance, in part, on channel partners for the sale and distribution of our products; risks associated with cyber-security events; the impact of reputational harm if users perceive our products as the cause of device failure; our ability to successfully develop new products or materially enhance current products through our research and development efforts; our ability to continue to attract new customers; our ability to retain our current customers; our ability to sell additional functionality to our current customers; our ability to meet service-level commitments under our subscription agreements; our ability to correctly estimate market opportunity and forecast market growth; risks associated with failing to continue our recent growth rates; our dependence on one of our products for a substantial portion of our revenue; our ability to scale our business and manage our expenses; our ability to change our pricing models, if necessary to compete successfully; the impact of delays or outages of our cloud services from any disruptions, capacity limitations or interferences of third-party data centers that host our cloud services, including AWS; our ability to maintain, enhance and protect our brand; our ability to maintain our corporate culture; the ability of Jamf Nation to thrive and grow as we expand our business; the potential impact of inaccurate, incomplete or misleading content that is posted on Jamf Nation; our ability to offer high-quality support; risks and uncertainties associated with potential acquisitions and divestitures, including, but not limited to, disruptions to ongoing operations; diversions of management from day-to-day responsibilities; adverse impacts on our financial condition; failure of an acquired business to further our strategy; uncertainty of synergies; personnel issues; resulting lawsuits and issues unidentified in diligence processes; our ability to predict and respond to rapidly evolving technological trends and our customers’ changing needs; our ability to compete with existing and new companies; the impact of adverse general and industry-specific economic and market conditions; the impact of reductions in IT spending; the impact of real or perceived errors, failures or bugs in our products; the impact of interruptions or performance problems associated with our technology or infrastructure; our ability to attract and retain highly qualified personnel; risks associated with competitive challenges faced by our customers; the impact of statutory and regulatory determinations on our offerings to governmental entities; risks associated with stringent and changing privacy laws, regulations and standards, and information security policies and contractual obligations related to data privacy and security; the impact of any catastrophic events; and, risks associated with our financial results or difficulty in predicting our financial results due to our revenue recognition. Given these factors, as well as other variables that may affect Jamf’s operating results, you should not rely on forward-looking statements, assume that past financial performance will be a reliable indicator of future performance, or use historical trends to anticipate results or trends in future periods. The forward-looking statements included in this press release and on the related teleconference call relate only to events as of the date hereof. Jamf undertakes no obligation to update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.

About Jamf

Jamf, the standard in Apple Enterprise Management, extends the legendary Apple experience that users have come to expect to businesses, hospitals, schools and government agencies through its software and the world’s largest online community of IT administrators exclusively focused on Apple, Jamf Nation.

Investor Contact:
Lisa Laukkanen & Lana Adair
[email protected]

Media Contact:
Rachel Nauen
[email protected]

 
 
Jamf Holding Corp.
Consolidated Balance Sheets
(In thousands, except share and per share data)
             
        June 30,   December 31,
          2020       2019  
Assets     (unaudited)    
             
Current assets:        
  Cash and cash equivalents   $ 38,424     $ 32,433  
  Trade accounts receivable, net     53,275       46,513  
  Income taxes receivable     554       14  
  Deferred contract costs     7,270       5,553  
  Prepaid expenses     10,880       10,935  
  Other current assets     6,314       3,133  
    Total current assets     116,717       98,581  
                     
Equipment and leasehold improvements, net     11,494       12,477  
Goodwill       539,818       539,818  
Other intangible assets, net     218,430       235,099  
Deferred contract costs     20,334       16,234  
Other assets     2,557       2,599  
                     
    Total assets   $ 909,350     $ 904,808  
                     
Liabilities and stockholders’ equity                
                     
Current liabilities:                
  Accounts payable   $ 3,909     $ 3,684  
  Accrued liabilities     26,099       26,927  
  Income taxes payable     1,081       819  
  Deferred revenues     130,309       120,089  
    Total current liabilities     161,398       151,519  
             
Deferred revenues, noncurrent     27,429       20,621  
Deferred tax liability     14,913       18,133  
Debt       201,891       201,319  
Other liabilities     6,876       9,338  
    Total liabilities     412,507       400,930  
             
Commitments and contingencies        
             
Stockholders’ equity:        
  Common stock, $0.001 par value, 132,000,000 shares authorized, 102,862,404 and        
  102,843,612 shares issued and outstanding at June 30, 2020 and December 31, 2019,        
  respectively     103       103  
  Additional paid-in capital     570,434       568,756  
  Accumulated deficit     (73,694 )     (64,981 )
    Total stockholders’ equity     496,843       503,878  
             
    Total liabilities and stockholders’ equity   $ 909,350     $ 904,808  
             

Jamf Holding Corp.
Consolidated Statements of Operations
(In thousands, except share and per share data)
(unaudited)
                     
        Three Months Ended June 30,   Six Months Ended June 30,
          2020       2019       2020       2019  
                                     
Revenue:                                  
  Subscription   $ 52,978     $ 37,216     $ 103,056     $ 70,956  
  Services     2,451       4,794       6,461       9,295  
  License     6,802       6,300       13,104       12,187  
    Total revenue     62,231       48,310       122,621       92,438  
                                     
Cost of revenue:                                
  Cost of subscription (exclusive of amortization shown below)     8,762       7,423       18,010       14,380  
  Cost of services (exclusive of amortization shown below)     2,207       3,549       5,293       7,192  
  Amortization expense     2,678       2,513       5,355       4,954  
    Total cost of revenue     13,647       13,485       28,658       26,526  
                                     
    Gross profit     48,584       34,825       93,963       65,912  
                                     
Operating expenses:                                
  Sales and marketing     20,202       16,612       42,484       31,888  
  Research and development     11,929       9,491       24,546       18,534  
  General and administrative     6,603       7,534       17,892       14,797  
  Amortization expense     5,634       5,626       11,308       11,259  
    Total operating expenses     44,368       39,263       96,230       76,478  
                                     
    Income (loss) from operations     4,216       (4,438 )     (2,267 )     (10,566 )
                                     
Interest expense, net     (4,690 )     (5,481 )     (9,468 )     (10,952 )
Foreign currency transaction loss     (13 )     (197 )     (317 )     (450 )
Other income, net     36       55       91       110  
    Loss before income tax benefit     (451 )     (10,061 )     (11,961 )     (21,858 )
                                     
Income tax benefit     28       2,390       3,248       5,177  
                                     
    Net loss   $ (423 )   $ (7,671 )   $ (8,713 )   $ (16,681 )
                                     
Net loss per share, basic and diluted   $ (0.00 )   $ (0.07 )   $ (0.08 )   $ (0.16 )
                                     
Weighted-average shares used to compute net loss per share, basic and diluted   102,862,404       102,709,405       102,861,475       102,694,756  
                                     
(1) Includes stock-based compensation as follows:                
        Three Months Ended June 30,   Six Months Ended June 30,
          2020       2019       2020       2019  
Cost of revenue:                
Subscription   $ 38     $ 55     $ 76     $ 118  
Services                        
Sales and marketing     111       143       222       236  
Research and development     141       95       298       185  
General and administrative     474       356       979       679  
        $ 764     $ 649     $ 1,575     $ 1,218  
                     

Jamf Holding Corp.
Consolidated Statements of Cash Flows
(In thousands)
(unaudited)
                 
            Six Months Ended June 30,
              2020       2019  
Cash provided by (used in) operating activities:                
  Net loss   $ (8,713 )   $ (16,681 )
  Adjustments to reconcile net loss to cash                
    provided by (used in) operating activities:                
    Depreciation and amortization expense     19,002       18,085  
    Amortization of deferred contract costs     4,218       2,795  
    Amortization of debt issuance costs     571       571  
    Provision for bad debt expense and returns     812        
    Loss (gain) on disposal of equipment and leasehold                
      improvements     12       (7 )
    Share-based compensation     1,575       1,218  
    Deferred taxes     (3,217 )     (5,407 )
    Adjustment to contingent consideration     (3,700 )      
    Changes in operating assets and liabilities:                
      Trade accounts receivable     (7,374 )     (10,637 )
      Income tax receivable/payable     (278 )     (226 )
      Prepaid expenses and other assets     429       (2,663 )
      Deferred contract costs     (10,035 )     (8,701 )
      Accounts payable     258       (1,437 )
      Accrued liabilities     (2,371 )     (828 )
      Deferred revenues     17,028       14,207  
      Other liabilities     1,240       (8 )
        Net cash provided by (used in) operating activities     9,457       (9,719 )
                         
Cash used in investing activities:                
  Acquisition, net of cash acquired           (35,306 )
  Purchases of equipment and leasehold improvements     (1,366 )     (3,319 )
        Net cash used in investing activities     (1,366 )     (38,625 )
                         
Cash used in financing activities:                
  Proceeds from credit agreements           40,000  
  Debt issuance costs           (1,550 )
  Cash paid for offering costs     (2,203 )      
  Proceeds from the exercise of stock options     103       656  
        Net cash used in financing activities     (2,100 )     39,106  
                         
        Net increase (decrease) in cash     5,991       (9,238 )
                         
Cash, beginning of period     32,433       39,240  
                         
Cash, end of period   $ 38,424     $ 30,002  
                 

Jamf Holding Corp.  
Supplemental Financial Information  
Disaggregated Revenues  
(In thousands)  
(unaudited)  
                   
    Three Months Ended June 30,   Six Months Ended June 30,  
      2020     2019     2020     2019  
                           
SaaS subscription and support and maintenance   $ 52,978   $ 37,216   $ 103,056   $ 70,956  
On-premise subscription     5,770     4,048     10,310     7,089  
Recurring revenue     58,748     41,264     113,366     78,045  
                   
Perpetual licenses     1,032     2,252     2,794     5,098  
Professional services     2,451     4,794     6,461     9,295  
Non-recurring revenue     3,483     7,046     9,255     14,393  
Total revenue   $ 62,231   $ 48,310   $ 122,621   $ 92,438  
                           

 

Jamf Holding Corp.
Supplemental Financial Information
Reconciliation of GAAP to non-GAAP Financial Data
(In thousands)
(unaudited)
               
  Three months ended June 30,   Six months ended June 30,
    2020       2019       2020       2019  
Operating expenses $ 44,368     $ 39,263     $ 96,230     $ 76,478  
Amortization expense   (5,634 )     (5,626 )     (11,308 )     (11,259 )
Stock-based compensation   (726 )     (594 )     (1,499 )     (1,100 )
Acquisition-related expense   (1,636 )           (3,236 )     (904 )
Acquisition-related earnout   3,700             3,700        
Non-GAAP Operating Expenses $ 40,072     $ 33,043     $ 83,887     $ 63,215  
               
  Three months ended June 30,   Six months ended June 30,
    2020       2019       2020       2019  
Gross profit $ 48,584     $ 34,825     $ 93,963     $ 65,912  
Amortization expense   2,678       2,513       5,355       4,954  
Stock-based compensation   38       55       76       118  
Non-GAAP Gross Profit $ 51,300     $ 37,393     $ 99,394     $ 70,984  
Non-GAAP Gross Profit Margin   82 %     77 %     81 %     77 %
               
  Three months ended June 30,   Six months ended June 30,
    2020       2019       2020       2019  
Operating income (loss) $ 4,216     $ (4,438 )   $ (2,267 )   $ (10,566 )
Stock-based compensation   764       649       1,575       1,218  
Acquisition-related expense   1,636             3,236       904  
Amortization expense   8,312       8,139       16,663       16,213  
Acquisition-related earnout   (3,700 )           (3,700 )      
Non-GAAP Operating Income $ 11,228     $ 4,350     $ 15,507     $ 7,769  
Non-GAAP Operating Income Margin   18 %     9 %     13 %     8 %
               
  Three Months Ended June 30,   Six Months Ended June 30,
    2020       2019       2020       2019  
Net loss $ (423 )   $ (7,671 )   $ (8,713 )   $ (16,681 )
Stock-based compensation   764       649       1,575       1,218  
Acquisition-related expense   1,636             3,236       904  
Amortization expense   8,312       8,139       16,663       16,213  
Acquisition-related earnout   (3,700 )           (3,700 )      
Foreign currency transaction loss   13       197       317       450  
Discrete tax items   108       5       (210 )     24  
Benefit for income taxes (1)   (1,716 )     (2,195 )     (4,420 )     (4,589 )
Non-GAAP Net Income (Loss) $ 4,994     $ (876 )   $ 4,748     $ (2,461 )
Net loss per share:              
Basic $ (0.00 )   $ (0.07 )   $ (0.08 )   $ (0.16 )
Diluted $ (0.00 )   $ (0.07 )   $ (0.08 )   $ (0.16 )
Weighted-average shares used in computing net loss per share:              
Basic   102,862,404       102,709,405       102,861,475       102,694,756  
Diluted   102,862,404       102,709,405       102,861,475       102,694,756  
Non-GAAP Net Income (Loss) per Share:              
Basic $ 0.05     $ (0.01 )   $ 0.05     $ (0.02 )
Diluted $ 0.05     $ (0.01 )   $ 0.05     $ (0.02 )
Weighted-average shares used in computing Non-GAAP Net Income (Loss) per Share:              
Basic   102,862,404       102,709,405       102,861,475       102,694,756  
Diluted   105,348,252       102,709,405       105,326,099       102,694,756  
               
(1) The related tax effects of the adjustments to Non-GAAP Net Income (Loss) were calculated using the respective statutory tax rates for applicable jurisdictions, which is not materially different from our annual effective tax rate of approximately 25%.
                               
               
  Three months ended June 30,   Six months ended June 30,
    2020       2019       2020       2019  
Net cash provided by (used in) operating activities $ 16,812     $ (1,860 )   $ 9,457     $ (9,719 )
Add:              
Cash paid for interest   4,528       5,499       9,262       10,568  
Cash paid for acquisition-related expense               1,600       904  
Less:              
Purchases of equipment and leasehold improvements   (327 )     (1,815 )     (1,366 )     (3,319 )
Unlevered free cash flow $ 21,013     $ 1,824     $ 18,953     $ (1,566 )
Unlevered free cash flow margin   34 %     4 %     15 %     -2 %
               

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