jamf(JAMF) - 2022 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION This section provides the unaudited financial statements, management's discussion, market risk disclosures, and controls and procedures for JAMF Holding Corp Item 1. Financial Statements (unaudited) Presents JAMF Holding Corp.'s unaudited condensed consolidated financial statements, including balance sheets, statements of operations, and cash flows, with accompanying notes Condensed Consolidated Balance Sheets Provides a snapshot of JAMF Holding Corp.'s financial position, detailing assets, liabilities, and equity as of specific dates Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $182,349 | $177,150 | | Goodwill | $823,671 | $845,734 | | Total assets | $1,466,090 | $1,480,420 | | Liabilities & Equity | | | | Deferred revenues (Current) | $249,374 | $223,031 | | Convertible senior notes, net | $363,265 | $362,031 | | Total liabilities | $772,144 | $741,994 | | Total stockholders' equity | $693,946 | $738,426 | Condensed Consolidated Statements of Operations Details JAMF Holding Corp.'s revenues, expenses, and net loss over specific periods, highlighting operational performance Statements of Operations Summary (in thousands, except per share data) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Total revenue | $115,638 | $86,238 | $223,896 | $166,965 | | Gross profit | $86,246 | $66,896 | $166,277 | $130,367 | | Loss from operations | $(61,842) | $(16,055) | $(85,579) | $(20,248) | | Net loss | $(63,139) | $(16,467) | $(88,768) | $(21,056) | | Net loss per share, basic and diluted | $(0.53) | $(0.14) | $(0.74) | $(0.18) | - Total revenue grew 34% YoY for both the three and six-month periods ended June 30, 2022, primarily driven by a 36% increase in subscription revenue[14] - Operating expenses increased significantly, leading to a larger loss from operations compared to the prior year periods. The increase was driven by higher sales and marketing, research and development, and general and administrative costs[14] Condensed Consolidated Statements of Cash Flows Summarizes the cash inflows and outflows from operating, investing, and financing activities for JAMF Holding Corp Cash Flow Summary (in thousands) | Activity | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $16,342 | $38,022 | | Net cash used in investing activities | $(6,978) | $(8,230) | | Net cash (used in) provided by financing activities | $(3,375) | $2,084 | | Net increase in cash and cash equivalents | $5,199 | $31,617 | - Net cash from operating activities decreased to $16.3 million from $38.0 million in the prior year period, primarily due to a larger net loss, partially offset by higher non-cash charges like share-based compensation[24] Notes to Condensed Consolidated Financial Statements Provides detailed explanations and additional information supporting the condensed consolidated financial statements, including accounting policies and significant transactions - The company specializes in Apple Enterprise Management through its cloud software platform, helping IT and security teams manage and protect Apple devices[26] - As of June 30, 2022, the company had $372.0 million of remaining performance obligations, with 71% expected to be recognized as revenue over the next 12 months[43] - On July 1, 2021, the company completed its acquisition of Wandera, a zero trust cloud security provider, for a total cash consideration of $409.3 million[59][60] - In Q2 2022, a modification to return target stock options resulted in the recognition of $33.0 million of stock-based compensation expense[84] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses financial performance, highlighting revenue growth, key business metrics, increased operating expenses, liquidity, and non-GAAP financial reconciliations Key Business Metrics Presents crucial operational metrics such as managed devices, Annual Recurring Revenue (ARR), and dollar-based net retention rate Key Performance Indicators | Metric | As of June 30, 2022 | As of June 30, 2021 | YoY Growth | | :--- | :--- | :--- | :--- | | Number of Devices | 28.4 million | 23.2 million | 22% | | Annual Recurring Revenue (ARR) | $466.0 million | $333.0 million | 40% | | Dollar-Based Net Retention Rate | 117% | 119% | (2 p.p.) | - Growth in devices and ARR was driven by expansion, new customer acquisition, cross-selling, and the acquisition of Wandera[125][127] Results of Operations Analyzes the company's revenue streams, cost of revenue, and operating expenses, explaining their impact on overall financial performance Revenue Comparison (in thousands) | Revenue Type | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Subscription | $109,407 | $80,718 | 36% | | Services | $5,027 | $3,929 | 28% | | License | $1,204 | $1,591 | (24)% | | Total Revenue | $115,638 | $86,238 | 34% | - Total revenue increased by 34% for both the three and six months ended June 30, 2022, driven by device expansion, new customers, cross-selling, and revenue from the Wandera acquisition[154][155] - Cost of revenue increased 52% YoY for Q2 2022, primarily due to higher employee compensation, increased stock-based compensation, and higher third-party hosting fees related to growth and the Wandera acquisition[156] - Operating expenses rose 79% YoY for Q2 2022, driven by increased headcount, a $12.7 million increase in stock-based compensation in Sales & Marketing, and a $9.5 million increase in stock-based compensation in R&D, largely due to a modification of return target options[161][163] Non-GAAP Financial Measures Reconciles GAAP financial results with non-GAAP measures like gross profit, operating income, net income, and Adjusted EBITDA, providing alternative performance views Non-GAAP Performance Summary (in thousands) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Non-GAAP Gross Profit | $93,933 | $70,175 | $181,479 | $136,824 | | Non-GAAP Operating Income | $4,506 | $7,701 | $10,351 | $15,549 | | Non-GAAP Net Income | $3,454 | $5,726 | $7,759 | $11,649 | | Adjusted EBITDA | $6,098 | $8,972 | $13,589 | $18,200 | - Non-GAAP gross profit margin remained stable at 81% for Q2 2022 and Q2 2021. However, Non-GAAP operating income margin decreased from 9% to 4% over the same period, reflecting higher operating expenses[179][181] Liquidity and Capital Resources Discusses the company's cash position, available credit facilities, deferred revenue, and future contractual obligations - As of June 30, 2022, principal sources of liquidity were cash and cash equivalents of $182.3 million and an available $150.0 million revolving credit facility[190] - The company had deferred revenue of $317.0 million as of June 30, 2022, with $249.4 million expected to be recognized as revenue in the next 12 months[191] - In Q2 2022, the company entered into an amended agreement for hosting services with a non-cancelable commitment of $100.0 million over the next three years[195] Item 3. Quantitative and Qualitative Disclosures About Market Risk Reports no material changes to the company's market risk disclosures since the prior annual report - There were no material changes to the company's market risk disclosures during the six months ended June 30, 2022[212] Item 4. Controls and Procedures Management concluded disclosure controls were ineffective due to a material weakness in accounting for sales commissions, with remediation efforts ongoing - Disclosure controls and procedures were deemed not effective as of June 30, 2022, due to a material weakness[213] - The material weakness stems from ineffective controls over the commission process, leading to incorrect capitalization of certain commissions that should have been expensed. This resulted in a revision of previously issued financial statements[215] - Management has implemented changes to processes and internal controls in 2022 to remediate the weakness, but the remediation is not yet complete[216] PART II. OTHER INFORMATION This section covers legal proceedings, risk factors, unregistered sales of equity securities, and a list of exhibits filed with the report Item 1. Legal Proceedings The company is not currently involved in any legal proceedings expected to materially adversely affect its financial condition or operations - The company is not currently involved in any legal proceedings that are expected to have a material adverse effect on its business[221] Item 1A. Risk Factors No material changes to the company's previously disclosed risk factors have occurred - No material changes to the risk factors disclosed in the Annual Report on Form 10-K for the year ended December 31, 2021 have occurred[222] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities or use of proceeds during the period - None[223] Item 6. Exhibits Lists exhibits filed with the Form 10-Q, including corporate governance documents and CEO/CFO certifications - Exhibits filed include corporate governance documents, CEO/CFO certifications, and Inline XBRL data files[228]