jamf(US:JAMF)2020-09-02 20:46Business Growth and Strategy - The number of devices on the software platform increased to 17.2 million as of June 30, 2020, representing a 19% year-over-year growth rate[135]. - Annual Recurring Revenue (ARR) reached $241.0 million as of June 30, 2020, a 36% increase from $177.1 million in the same period of 2019[137]. - The dollar-based net retention rate was 117% for the trailing twelve months ended June 30, 2020, indicating strong customer expansion despite a slight decrease from 120% in 2019[141]. - The company plans to continue investing in growth, targeting expansion within midmarket and enterprise customers, and enhancing brand awareness through marketing efforts[128]. - The company aims to sustain product innovation and technology leadership to maintain its competitive advantage, with a focus on developing new products and features[127]. - The company intends to continue international expansion by investing in sales and marketing channels to adapt to local market dynamics[130]. - The company emphasizes the importance of enhancing offerings via its partner network to drive growth and reach more enterprise customers[131]. - The company’s focus on a "land and expand" business model allows for efficient revenue growth from existing customers through increased usage of software solutions[126]. Financial Performance - Non-GAAP Gross Profit for Q2 2020 was $51,300,000, up from $37,393,000 in Q2 2019, representing a 37% increase[148]. - Non-GAAP Gross Profit Margin improved to 82% in Q2 2020 from 77% in Q2 2019[148]. - Non-GAAP Operating Income for Q2 2020 was $11,228,000, compared to $4,350,000 in Q2 2019, reflecting a 158% increase[152]. - Non-GAAP Operating Income Margin increased to 18% in Q2 2020 from 9% in Q2 2019[152]. - Non-GAAP Net Income for Q2 2020 was $4,994,000, compared to a loss of $876,000 in Q2 2019[157]. - Adjusted EBITDA for Q2 2020 was $12,368,000, significantly higher than $5,404,000 in Q2 2019, marking a 129% increase[162]. - Total revenue increased by $13.9 million, or 29%, for the three months ended June 30, 2020, compared to the same period in 2019, driven by higher subscription revenue[189]. - Subscription revenue for the three months ended June 30, 2020, was $52,978 thousand, a 42% increase from $37,216 thousand in 2019[188]. - Recurring revenue accounted for 94% of total revenue for the three months ended June 30, 2020, compared to 85% for the same period in 2019[189]. - Total revenue increased by $30.2 million, or 33%, for the six months ended June 30, 2020, compared to the same period in 2019[191]. - Subscription revenue for the six months ended June 30, 2020, was $103,056 thousand, a 45% increase from $70,956 thousand in 2019[188]. - Recurring revenue accounted for 92% of total revenue for the six months ended June 30, 2020, compared to 84% for the same period in 2019[191]. - Gross profit for the three months ended June 30, 2020, was $48,584 thousand, compared to $34,825 thousand in 2019[188]. - The company reported a net loss of $423 thousand for the three months ended June 30, 2020, compared to a net loss of $7,671 thousand in 2019[182]. Expenses and Costs - Research and development expenses are expected to increase in absolute dollars to support innovation and new solutions[173]. - General and administrative expenses are projected to rise as the company invests in technology infrastructure and expands operations globally[174]. - Sales and marketing expenses increased by $10.6 million, or 33%, for the six months ended June 30, 2020, primarily due to higher employee compensation costs[200]. - Research and development expenses increased by $6.0 million, or 32%, for the six months ended June 30, 2020, driven by higher headcount and outside services[202]. - General and administrative expenses increased by $3.1 million, or 21%, for the six months ended June 30, 2020, primarily due to higher employee compensation costs and acquisition-related expenses[204]. Revenue Changes - License revenue is anticipated to decrease as new customer sales shift towards cloud-based subscriptions[166]. - Services revenue decreased due to COVID-19 impacting in-person training sessions[189]. - License revenue decreased as customers shifted to the SaaS model instead of on-premise, perpetual licenses[190]. - Subscription gross margin improved to 85% for the three months ended June 30, 2020, compared to 82% for the same period in 2019[194]. - Services gross margin decreased to 37% for the three months ended June 30, 2020, down from 50% for the same period in 2019, primarily due to a larger decrease in services revenues[195]. - Total gross margin was 78% for the three months ended June 30, 2020, compared to 72% for the same period in 2019[196]. Cash Flow and Debt - As of June 30, 2020, the company had cash and cash equivalents of $38.4 million, up from $30.0 million at the end of the previous period[229]. - Net cash provided by operating activities for the six months ended June 30, 2020, was $9.5 million, compared to a net cash used of $9.7 million in 2019[230]. - Deferred revenue as of June 30, 2020, was $157.7 million, with $130.3 million expected to be recognized as revenue in the next 12 months[218]. - The company closed its IPO on July 24, 2020, raising approximately $319.0 million after expenses, and repaid $205.0 million of its Term Loan Facility[215]. - Net cash used in investing activities for the six months ended June 30, 2020, was $1.4 million, significantly lower than $38.6 million in 2019, which included a major acquisition[232]. - The company recorded a loss on debt extinguishment of $5.2 million related to the repayment of debt in the third quarter of 2020[215]. - As of June 30, 2020, the effective interest rate on the Term Loan Facility was 8.70% per annum, higher than the contract rate due to amortization of debt issuance costs[224]. - The company has total outstanding debt of $205.0 million as of June 30, 2020, with no borrowings under its Term Loan Facility[250]. - The contract interest rate on the Term Loan Facility was 8.00% per annum, with an effective interest rate of 8.70% per annum due to amortization of debt issuance costs[249]. Market and Economic Factors - A hypothetical 10% change in foreign currency exchange rates would not have had a material impact on the company's consolidated financial statements during the three and six months ended June 30, 2020[247]. - A 100-basis point increase or decrease in market interest rates would result in a change to interest expense of $2.1 million on an annual basis[250]. - The company has not entered into any hedging arrangements regarding foreign currency risk or other derivative financial instruments[247]. - The company believes the effects of inflation on its results of operations and financial condition have not been significant to date[252]. Compliance and Reporting - The company qualifies as an "emerging growth company" under the JOBS Act, allowing it to take advantage of certain reporting exemptions[240]. - The company has elected to use an extended transition period for complying with new or revised accounting standards[241]. - There have been no material changes to the company's critical accounting policies and estimates disclosed in its IPO Prospectus[244].