jamf(JAMF) - 2021 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements Jamf Holding Corp.'s Q1 2021 unaudited financials report $1.12 billion in total assets, $81.2 million revenue (34% YoY growth), and a $3.1 million net loss, an improvement from the prior year Consolidated Balance Sheets Total assets increased to $1.115 billion as of March 31, 2021, driven by cash and other assets, while total liabilities rose to $295.9 million Balance Sheet Summary | Balance Sheet Items | March 31, 2021 (in thousands) | December 31, 2020 (in thousands) | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $196,190 | $194,868 | | Goodwill | $541,850 | $541,480 | | Total current assets | $301,193 | $288,911 | | Total assets | $1,115,184 | $1,078,153 | | Liabilities & Equity | | | | Deferred revenues (Current) | $167,868 | $160,443 | | Total current liabilities | $202,896 | $199,697 | | Total liabilities | $295,921 | $262,672 | | Total stockholders' equity | $819,263 | $815,481 | Consolidated Statements of Operations Q1 2021 total revenue grew 34% to $81.2 million, driven by subscription revenue, with net loss narrowing to $3.1 million due to improved gross profit and lower interest expense Consolidated Statements of Operations Summary | Metric | Q1 2021 (in thousands) | Q1 2020 (in thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Subscription Revenue | $74,923 | $54,618 | +37% | | Total Revenue | $81,168 | $60,390 | +34% | | Gross Profit | $63,912 | $45,379 | +41% | | Loss from Operations | $(2,778) | $(6,483) | Improvement | | Interest Expense, net | $(55) | $(4,778) | -99% | | Net Loss | $(3,069) | $(8,290) | Improvement | | Net Loss Per Share | $(0.03) | $(0.08) | Improvement | Consolidated Statements of Cash Flows Q1 2021 operating cash flow turned positive at $4.0 million, driven by a smaller net loss and deferred revenue, while investing activities used $6.3 million Consolidated Statements of Cash Flows Summary | Cash Flow Activity | Q1 2021 (in thousands) | Q1 2020 (in thousands) | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $4,023 | $(7,355) | | Net cash used in investing activities | $(6,319) | $(1,039) | | Net cash provided by (used in) financing activities | $4,019 | $(1,362) | | Net increase (decrease) in cash | $1,322 | $(9,756) | Notes to Consolidated Financial Statements Notes detail accounting policies, the adoption of ASC 842, the $3.4 million acquisition of cmdReporter, and the planned $400.0 million acquisition of Wandera - The company operates as a single reportable segment. Revenue from The Americas constituted the largest portion of geographic revenue, growing to $61.3 million in Q1 2021 from $47.0 million in Q1 2020[27] - On February 26, 2021, the company acquired cmdReporter for an aggregate purchase price of approximately $3.4 million, funded by cash on hand. The acquisition included $0.4 million in contingent consideration[55] - On May 11, 2021, the company announced a definitive agreement to acquire Wandera, Inc. for $400.0 million in cash. The transaction is expected to close in Q3 2021[90] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes 34% revenue growth to strong subscription performance, with ARR up 37% to $308.0 million and a solid liquidity position of $196.2 million cash Key Business Metrics Key business metrics show strong growth, with 21.8 million devices managed (34% YoY increase) and Annual Recurring Revenue (ARR) up 37% to $308.0 million Key Business Metrics Overview | Metric | As of March 31, 2021 | As of March 31, 2020 | YoY Growth | | :--- | :--- | :--- | :--- | | Number of Devices | 21.8 million | 16.3 million | 34% | | Annual Recurring Revenue (ARR) | $308.0 million | $224.9 million | 37% | | Dollar-Based Net Retention Rate | 117% | 120% | -3 p.p. | Non-GAAP Financial Measures Non-GAAP measures for Q1 2021 show Gross Profit of $67.1 million (83% margin) and Adjusted EBITDA nearly doubled to $10.6 million year-over-year Non-GAAP Financial Performance | Non-GAAP Metric | Q1 2021 (in thousands) | Q1 2020 (in thousands) | | :--- | :--- | :--- | | Non-GAAP Gross Profit | $67,090 | $48,094 | | Non-GAAP Operating Income | $9,263 | $4,279 | | Non-GAAP Net Income (Loss) | $9,258 | $(245) | | Adjusted EBITDA | $10,643 | $5,569 | Results of Operations Q1 2021 total revenue grew 34% to $81.2 million, with gross margin improving to 79%, while operating expenses increased 29% due to growth investments - Total revenue increased by $20.8 million (34%) in Q1 2021 compared to Q1 2020, primarily due to a $20.3 million (37%) increase in subscription revenue from device expansion and new customers[179] - Gross margin improved to 79% in Q1 2021 from 75% in Q1 2020, as revenue grew faster than the cost of revenue[182] - Operating expenses increased by $14.8 million (29%), driven by higher employee compensation costs from headcount growth in Sales & Marketing and R&D, and increased public company costs in G&A[183][184][186] Liquidity and Capital Resources The company maintains $196.2 million in cash and equivalents, with $4.0 million operating cash flow, and secured a $250.0 million term loan for the Wandera acquisition - Principal sources of liquidity as of March 31, 2021, were cash and cash equivalents of $196.2 million and an available revolving credit facility[194] - On May 5, 2021, the company secured a commitment letter for a 364-day term loan facility of up to $250.0 million, intended to be used for the Wandera acquisition[195] Item 3. Quantitative and Qualitative Disclosures About Market Risk Primary market risk stems from foreign currency exchange rates impacting operating expenses, though most revenue is USD-denominated, and no hedging is employed - The company's primary market risk is from foreign currency exchange rates, as operating expenses are located in countries like the U.S., Poland, and the Netherlands. Most revenue is denominated in U.S. dollars[215] - The company has not entered into any hedging arrangements for foreign currency risk and believes the effects of inflation have not been significant[215][216] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2021, with no material changes to internal control over financial reporting - The principal executive officer and principal financial officer concluded that as of March 31, 2021, the company's disclosure controls and procedures were effective at the reasonable assurance level[217] - No material changes to internal control over financial reporting occurred during the quarter ended March 31, 2021[218] PART II. OTHER INFORMATION Item 1. Legal Proceedings The company is not currently involved in any material litigation that would adversely affect its business or financial condition - The company is not presently a party to any material litigation[222] Item 1A. Risk Factors New risk factors primarily concern the proposed Wandera acquisition, including completion uncertainty, integration challenges, and significant transaction costs - The completion of the Wandera acquisition is subject to customary closing conditions, including U.S. regulatory approvals, and there is no assurance these will be met[224] - The company will incur significant non-recurring costs related to the acquisition, including fees for advisors and potential integration expenses, regardless of whether the acquisition is completed[230][231] - Potential difficulties in integrating Wandera's business include loss of key employees, disruption of ongoing business, and inconsistencies in policies, which could adversely affect operating results[232][236] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of equity securities were reported during the period - None[239] Item 6. Exhibits Exhibits filed with Form 10-Q include the Wandera acquisition merger agreement and CEO/CFO certifications - Key exhibits filed include the Merger Agreement for the acquisition of Wandera, Inc. and certifications by the CEO and CFO[245]