JAMF HOLDING CORP.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (continued)
(in thousands, except share amounts)
(unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Stock Class | | Additional Paid‑In Capital | | Accumulated Other Comprehensive Loss | | Accumulated Deficit | | Stockholders’ Equity |
| Common | | | | |
| Shares | | Amount | | | | |
| | | | | | | | | | | |
Six Months Ended June 30, 2022: |
| | | | | | | | | | | |
Balance, December 31, 2021 | 119,426,064 | | | $ | 119 | | | $ | 913,581 | | | $ | (7,866) | | | $ | (167,408) | | | $ | 738,426 | |
Exercise of stock options | 270,773 | | | 1 | | | 1,542 | | | — | | | — | | | 1,543 | |
Vesting of restricted stock units | 482,760 | | | — | | | — | | | — | | | — | | | — | |
Issuance of common stock under the employee stock purchase plan | 130,450 | | | — | | | 3,419 | | | — | | | — | | | 3,419 | |
Share‑based compensation | — | | | — | | | 69,034 | | | — | | | — | | | 69,034 | |
Foreign currency translation adjustments | — | | | — | | | — | | | (29,708) | | | — | | | (29,708) | |
Net loss | — | | | — | | | — | | | — | | | (88,768) | | | (88,768) | |
Balance, June 30, 2022 | 120,310,047 | | | $ | 120 | | | $ | 987,576 | | | $ | (37,574) | | | $ | (256,176) | | | $ | 693,946 | |
| | | | | | | | | | | |
Six Months Ended June 30, 2021: |
| | | | | | | | | | | |
Balance, December 31, 2020 | 116,992,472 | | | $ | 117 | | | $ | 903,116 | | | $ | — | | | $ | (92,219) | | | $ | 811,014 | |
Exercise of stock options | 1,257,440 | | | 1 | | | 7,062 | | | — | | | — | | | 7,063 | |
Share‑based compensation | — | | | — | | | 6,938 | | | — | | | — | | | 6,938 | |
Net loss | — | | | — | | | — | | | — | | | (21,056) | | | (21,056) | |
Balance, June 30, 2021 | 118,249,912 | | | $ | 118 | | | $ | 917,116 | | | $ | — | | | $ | (113,275) | | | $ | 803,959 | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
JAMF HOLDING CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
| | | | | | | | | | | |
| Six Months Ended June 30, |
| 2022 | | 2021 |
Cash flows from operating activities | | | |
Net loss | $ | (88,768) | | | $ | (21,056) | |
Adjustments to reconcile net loss to cash provided by operating activities: | | | |
Depreciation and amortization expense | 27,784 | | | 19,538 | |
Amortization of deferred contract costs | 7,859 | | | 5,861 | |
Amortization of debt issuance costs | 1,358 | | | 249 | |
Non-cash lease expense | 2,943 | | | 2,398 | |
Provision for credit losses and returns | 274 | | | (41) | |
Share‑based compensation | 69,034 | | | 6,938 | |
Deferred tax benefit | (1,199) | | | (669) | |
Adjustment to contingent consideration | 188 | | | 4,237 | |
Other | 1,438 | | | 454 | |
Changes in operating assets and liabilities: | | | |
Trade accounts receivable | (17,870) | | | 2,249 | |
Income tax receivable/payable | 165 | | | (238) | |
Prepaid expenses and other assets | (3,851) | | | (2,986) | |
Deferred contract costs | (15,438) | | | (11,848) | |
Accounts payable | 292 | | | 2,284 | |
Accrued liabilities | (3,100) | | | (1,889) | |
Deferred revenue | 35,233 | | | 32,627 | |
Other liabilities | — | | | (86) | |
Net cash provided by operating activities | 16,342 | | | 38,022 | |
Cash flows from investing activities | | | |
Acquisitions, net of cash acquired | (4,023) | | | (3,041) | |
Purchases of equipment and leasehold improvements | (2,876) | | | (5,211) | |
Other | (79) | | | 22 | |
Net cash used in investing activities | (6,978) | | | (8,230) | |
Cash flows from financing activities | | | |
Debt issuance costs | (50) | | | (530) | |
Cash paid for offering costs | (80) | | | (243) | |
Cash paid for contingent consideration | (4,588) | | | (4,206) | |
Payment of acquisition-related holdback | (200) | | | — | |
Proceeds from the exercise of stock options | 1,543 | | | 7,063 | |
Net cash (used in) provided by financing activities | (3,375) | | | 2,084 | |
Effect of exchange rate changes on cash and cash equivalents | (790) | | | (259) | |
Net increase in cash and cash equivalents | 5,199 | | | 31,617 | |
Cash and cash equivalents, beginning of period | 177,150 | | | 194,868 | |
Cash and cash equivalents, end of period | $ | 182,349 | | | $ | 226,485 | |
| | | | | | | | | | | |
Supplemental disclosures of cash flow information: | | | |
Cash paid for: | | | |
Interest | $ | 371 | | | $ | 6 | |
Income taxes, net of refunds | 751 | | | 832 | |
Non-cash activities: | | | |
Employee stock purchase plan | 3,419 | | | — | |
Offering costs accrued but not paid | 44 | | | 300 | |
Operating lease assets obtained in exchange for operating lease liabilities | 8,497 | | | (19) | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
JAMF HOLDING CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Note 1. Basis of presentation and description of business
Description of business
We are the standard in Apple Enterprise Management, and our cloud software platform is the only vertically-focused Apple infrastructure and security platform of scale in the world. We help IT and security teams confidently protect the devices, data, and applications used by their workforce, while providing employees with consumer-simple, privacy-protecting technology. With Jamf’s software, devices can be deployed to employees brand new in the shrink-wrapped box, set up automatically and personalized at first power-on, and administered continuously throughout the lifecycle of the device. Our customers are located throughout the world.
Basis of presentation and principles of consolidation
The accompanying condensed consolidated financial statements, which include the accounts of the Company and its wholly owned subsidiaries, have been prepared in accordance with GAAP and applicable rules and regulations of the SEC regarding interim financial reporting. All intercompany accounts and transactions have been eliminated.
Unaudited interim condensed consolidated financial information
The interim condensed consolidated balance sheet as of June 30, 2022, the condensed consolidated statements of operations, of comprehensive loss, and of stockholders’ equity for the three and six months ended June 30, 2022 and 2021, the condensed consolidated statements of cash flows for the six months ended June 30, 2022 and 2021, and the related notes are unaudited. The condensed consolidated balance sheet as of December 31, 2021 was derived from our audited consolidated financial statements that were included in our Annual Report on Form 10-K for the year ended December 31, 2021, which was filed with the SEC on March 1, 2022. The accompanying unaudited condensed consolidated financial statements and related notes should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.
These unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and, in management’s opinion, include all adjustments necessary for the fair presentation of the consolidated financial position, results of operations, and cash flows of the Company. All adjustments made were of a normal recurring nature. The results for the three and six months ended June 30, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022 or for any future period.
Use of estimates
The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the reporting date, and the reported amounts of revenues and expenses during the reporting period. These estimates are based on management’s best knowledge of current events and actions that the Company may undertake in the future and include, but are not limited to, revenue recognition, stock-based compensation, commissions, the fair values of assets acquired and liabilities assumed in business combinations, useful lives for finite-lived assets, recoverability of long-lived assets, the value of right-of-use assets and lease liabilities, allowance for expected credit losses, commitments and contingencies, and accounting for income taxes and related valuation allowances against deferred tax assets. Actual results could differ from those estimates.
JAMF HOLDING CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
Segment and geographic information
Our CODM is our Chief Executive Officer, who reviews financial information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance, and allocating resources. We operate our business as one operating segment and therefore we have one reportable segment.
Revenues by geographic region as determined based on the location where the sale originated were as follows:
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2022 | | 2021 (1) | | 2022 | | 2021 (1) |
| (in thousands) |
The Americas (2) | $ | 79,980 | | | $ | 62,419 | | | $ | 155,129 | | | $ | 121,264 | |
Europe, the Middle East, India, and Africa | 27,517 | | | 17,701 | | | 53,514 | | | 33,930 | |
Asia Pacific | 8,141 | | | 6,118 | | | 15,253 | | | 11,771 | |
| $ | 115,638 | | | $ | 86,238 | | | $ | 223,896 | | | $ | 166,965 | |
(1) Previously reported revenues by geographic region for the three and six months ended June 30, 2021 have been revised to correct an immaterial error in the disclosure. There was no impact to total revenues.
(2) The vast majority of our Americas revenues comes from the United States.
Note 2. Summary of significant accounting policies
The Company’s significant accounting policies are discussed in Note 2 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. There have been no significant changes to these policies during the three and six months ended June 30, 2022. The following describes the impact of certain policies.
Trade accounts receivable, net
Credit is extended to customers in the normal course of business, generally with 30-day payment terms. Trade accounts receivable are recorded at the invoiced amount, net of allowances.
The allowance for credit losses is based on an expected loss model that estimates losses over the expected life of the trade accounts receivable. The Company estimates expected credit losses based on the Company’s historical loss information, current and future economic and market conditions, and ongoing review of customers’ account balances.
The Company writes-off a receivable against the allowance when a determination is made that the balance is uncollectible and collection of the receivable is no longer being actively pursued. This determination is based on the delinquency of the account, the financial condition of the customer, and the Company’s collection experience.
Activity related to our allowance for credit losses for trade accounts receivable was as follows:
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2022 | | 2021 | | 2022 | | 2021 |
| (in thousands) |
Balance, beginning of period | $ | 492 | | | $ | 603 | | | $ | 391 | | | $ | 530 | |
Provision | 140 | | | (100) | | | 262 | | | 56 | |
Write-offs | (155) | | | (45) | | | (182) | | | (172) | |
Recoveries of amounts previously written off | 2 | | | 22 | | | 8 | | | 66 | |
Balance, end of period | $ | 479 | | | $ | 480 | | | $ | 479 | | | $ | 480 | |
JAMF HOLDING CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
Revenue recognition
The Company applies ASC 606 and follows a five-step model to determine the appropriate amount of revenue to be recognized in accordance with ASC 606.
Disaggregation of Revenue
The Company separates revenue into subscription and non-subscription categories to disaggregate those revenues that are term-based and renewable from those that are one-time in nature. Revenue from subscription and non-subscription contractual arrangements were as follows:
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2022 | | 2021 | | 2022 | | 2021 |
| (in thousands) |
SaaS subscription and support and maintenance | $ | 104,291 | | | $ | 72,121 | | | $ | 200,641 | | | $ | 138,897 | |
On‑premise subscription | 5,116 | | | 8,597 | | | 10,967 | | | 16,303 | |
Subscription revenue | 109,407 | | | 80,718 | | | 211,608 | | | 155,200 | |
Professional services | 5,027 | | | 3,929 | | | 8,971 | | | 7,932 | |
Perpetual licenses | 1,204 | | | 1,591 | | | 3,317 | | | 3,833 | |
Non‑subscription revenue | 6,231 | | | 5,520 | | | 12,288 | | | 11,765 | |
Total revenue | $ | 115,638 | | | $ | 86,238 | | | $ | 223,896 | | | $ | 166,965 | |
Contract Balances
If revenue is recognized in advance of the right to invoice, a contract asset is recorded in other current assets on the condensed consolidated balance sheets. The opening and closing balances of contract assets were as follows:
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2022 | | 2021 | | 2022 | | 2021 |
| (in thousands) |
Balance, beginning of the period | $ | 1,885 | | | $ | 1,186 | | | $ | 1,792 | | | $ | 947 | |
Balance, end of the period | 1,840 | | | 1,596 | | | 1,840 | | | 1,596 | |
Change | $ | (45) | | | $ | 410 | | | $ | 48 | | | $ | 649 | |
For the three and six months ended June 30, 2022 and 2021, the allowance for expected credit losses associated with contract assets was not material.
Contract liabilities consist of customer billings in advance of revenue being recognized. The Company invoices its customers for subscription, support and maintenance, and services in advance.
Changes in contract liabilities, including revenue earned during the period from the beginning contract liability balance and new deferrals of revenue during the period, were as follows:
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2022 | | 2021 | | 2022 | | 2021 |
| (in thousands) |
Balance, beginning of the period | $ | 292,499 | | | $ | 221,579 | | | $ | 282,128 | | | $ | 205,509 | |
Revenue earned | (93,199) | | | (66,967) | | | (154,473) | | | (111,398) | |
Deferral of revenue | 117,652 | | | 83,845 | | | 189,297 | | | 144,346 | |
Balance, end of the period | $ | 316,952 | | | $ | 238,457 | | | $ | 316,952 | | | $ | 238,457 | |
JAMF HOLDING CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
There were no significant changes to our contract assets and liabilities during the three and six months ended June 30, 2022 and 2021 outside of our sales activities.
Remaining Performance Obligations
Revenue allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes deferred revenue and noncancellable amounts to be invoiced. 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 succeeding 12 months, and the remainder generally expected to be recognized over the three years thereafter.
Deferred Contract Costs
Sales commissions, as well as associated payroll taxes and retirement plan contributions (together, contract costs), that are incremental to the acquisition of customer contracts are capitalized using a portfolio approach as deferred contract costs in the condensed consolidated balance sheets when the period of benefit is determined to be greater than one year.
Total amortization of contract costs for the three months ended June 30, 2022 and 2021 was $4.1 million and $3.2 million, respectively. Total amortization of contract costs for the six months ended June 30, 2022 and 2021 was $7.9 million and $5.9 million, respectively.
The Company periodically reviews these deferred contract costs to determine whether events or changes in circumstances have occurred that could affect the period of benefit of these deferred contract costs. There were no impairment losses recorded during the three and six months ended June 30, 2022 and 2021.
Adoption of new accounting pronouncements
Business Combinations — Accounting for Contract Assets and Contract Liabilities from Contracts with Customers
In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606. Generally, this new guidance will result in the acquirer recognizing contract assets and contract liabilities at the same amounts recorded by the acquiree. Historically, such amounts were recognized by the acquirer at fair value in accordance with acquisition accounting. The new guidance should be applied prospectively to acquisitions occurring on or after the effective date. The standard is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted, including in interim periods, for any financial statements that have not been issued. The Company early adopted the new standard on January 1, 2022. The adoption of the standard did not have any impact on the Company’s condensed consolidated financial statements. We will apply the new guidance to future acquisitions.
Note 3. Financial instruments fair value
We report financial assets and liabilities and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the condensed consolidated financial statements on a recurring basis in accordance with ASC 820. ASC 820 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, we consider the principal or most advantageous market in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions, and credit risk.
JAMF HOLDING CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
ASC 820 also establishes a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three levels. Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. GAAP established a hierarchy framework to classify the fair value based on the observability of significant inputs to the measurement. The levels of the fair value hierarchy are as follows:
Level 1: Fair value is determined using an unadjusted quoted price in an active market for identical assets or liabilities.
Level 2: Fair value is estimated using inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly.
Level 3: Fair value is estimated using unobservable inputs that are significant to the fair value of the assets or liabilities.
Assets and liabilities measured at fair value on a recurring basis
The Company invests in money market funds with original maturities at the time of purchase of three months or less, which are measured and recorded at fair value on a recurring basis. Money market funds are valued based on quoted market prices in active markets and classified within Level 1 of the fair value hierarchy.
In addition, the contingent consideration associated with the Digita and cmdReporter acquisitions are measured and recorded at fair value on a recurring basis. The estimated fair value of the contingent payments associated with the Digita acquisition is determined using a Monte Carlo simulation model, which uses Level 3 inputs, including assumptions about the probability of growth of subscription services and the related pricing of the services offered. Significant increases (decreases) in the probability of growth of subscription services as well as the related pricing of the services offered would have resulted in a higher (lower) fair value measurement. The estimated fair value of the contingent payments associated with the cmdReporter acquisition was determined using projected contract wins, which used Level 3 inputs, including assumptions about the probability of closing contracts based on their current stage in the sales process. See Note 4 for more information.
JAMF HOLDING CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
The fair value of these financial instruments were as follows:
| | | | | | | | | | | | | | | | | | | | | | | |
| June 30, 2022 |
| Level 1 | | Level 2 | | Level 3 | | Total |
| (in thousands) |
Cash equivalents: | | | | | | | |
Money market funds | $ | 151,172 | | | $ | — | | | $ | — | | | $ | 151,172 | |
Total cash equivalents | $ | 151,172 | | | $ | — | | | $ | — | | | $ | 151,172 | |
| | | | | | | |
Contingent consideration: | | | | | | | |
Accrued liabilities | $ | — | | | $ | — | | | $ | 5,700 | | | $ | 5,700 | |
Total contingent consideration | $ | — | | | $ | — | | | $ | 5,700 | | | $ | 5,700 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| December 31, 2021 |
| Level 1 | | Level 2 | | Level 3 | | Total |
| (in thousands) |
Cash equivalents: | | | | | | | |
Money market funds | $ | 146,037 | | | $ | — | | | $ | — | | | $ | 146,037 | |
Total cash equivalents | $ | 146,037 | | | $ | — | | | $ | — | | | $ | 146,037 | |
| | | | | | | |
Contingent consideration: | | | | | | | |
Accrued liabilities | $ | — | | | $ | — | | | $ | 4,588 | | | $ | 4,588 | |
Other liabilities | — | | | — | | | 5,512 | | | 5,512 | |
Total contingent consideration | $ | — | | | $ | — | | | $ | 10,100 | | | $ | 10,100 | |
The carrying value of accounts receivable and accounts payable approximate their fair value due to their short maturities and are excluded from the tables above.
The following table provides a summary of the changes in contingent consideration, which is classified as Level 3:
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2022 | | 2021 | | 2022 | | 2021 |
| (in thousands) |
Balance, beginning of period | $ | 5,600 | | | $ | 8,799 | | | $ | 10,100 | | | $ | 8,200 | |
Additions | — | | | — | | | — | | | 359 | |
Total (gains) losses included in: | | | | | | | |
Net loss | 100 | | | 3,937 | | | 188 | | | 4,237 | |
Payments | — | | | (4,206) | | | (4,588) | | | (4,206) | |
Other | — | | | (230) | | | — | | | (290) | |
Balance, end of period | $ | 5,700 | | | $ | 8,300 | | | $ | 5,700 | | | $ | 8,300 | |
The change in the fair value of the contingent consideration is included in general and administrative expenses in the condensed consolidated statements of operations. The adjustment for the three and six months ended June 30, 2022 and 2021 primarily reflected updated assumptions about the probability of growth of subscription services.
JAMF HOLDING CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
Fair value measurements of other financial instruments
The following table presents the net carrying value and estimated fair value of the 2026 Notes, which are not recorded at fair value in the condensed consolidated balance sheets:
| | | | | | | | | | | | | | | | | | | | | | | |
| June 30, 2022 | | December 31, 2021 |
| Net Carrying Value | | Estimated Fair Value | | Net Carrying Value | | Estimated Fair Value |
| (in thousands) |
2026 Notes | $ | 363,265 | | | $ | 317,699 | | | $ | 362,031 | | | $ | 398,044 | |
As of June 30, 2022 and December 31, 2021, the difference between the net carrying value of the 2026 Notes and the principal amount of $373.8 million represents the unamortized debt issuance costs of $10.5 million and $11.7 million, respectively. See Note 8 for more information. The estimated fair value of the 2026 Notes, which is classified as Level 2, was determined based on quoted bid prices of the 2026 Notes in an over-the-counter market on the last trading day of the reporting period.
Note 4. Acquisitions
During the first quarter of 2022, the Company completed two acquisitions to expand our products and services offerings. These acquisitions were not significant individually or in the aggregate to our condensed consolidated financial statements. The combined purchase price for these acquisitions was $4.0 million, which was paid with cash on hand. The purchase price was allocated to the assets acquired based on their estimated fair values as of the date of each acquisition. The allocation included $0.9 million to developed technology with an estimated useful life of 5.0 years and $0.1 million to other assets, with the remaining $3.0 million allocated to goodwill. The goodwill is not deductible for income tax purposes. Acquisition-related expenses of $0.4 million were expensed as incurred. These expenses were recognized as acquisition costs in general and administrative expenses in the condensed consolidated statement of operations.
Wandera
On July 1, 2021, the Company completed its acquisition of Wandera. Wandera is a leader in zero trust cloud security and access for mobile devices. As an Apple-first provider of unified cloud security, Wandera expanded the Company’s security offering for the enterprise. Building on the Company’s existing capabilities, Wandera added ZTNA, mobile threat defense, and data policy features to ensure mobile workers can simply and safely access the network resources they need while complying with organizational policies and reducing mobile charges. This acquisition uniquely positioned the Company to help IT and security teams confidently protect the devices, data, and applications used by a mobile workforce, while extending the intended Apple experience through the Company’s robust and scalable Apple Enterprise Management platform.
Under the terms of the Merger Agreement, the Company acquired 100% of the voting equity interest in Wandera and paid total cash consideration of $409.3 million. The total consideration consisted of an initial payment of $359.3 million at close and deferred consideration of $50.0 million that was paid in $25.0 million increments on October 1, 2021 and December 15, 2021. The initial payment of $359.3 million included $0.7 million held back as partial security for post-closing true-up adjustments as well as indemnification claims made within one year of the acquisition date. The amount held back was released in the fourth quarter of 2021. The acquisition was initially financed with cash on hand and borrowings under the 2021 Term Loan Facility.
The Company accounted for the acquisition by applying the acquisition method of accounting for business combinations in accordance with ASC 805. Accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based on their estimated fair values as of the date of acquisition. In accordance with GAAP, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Any residual purchase price is recorded as goodwill. The allocation of the purchase price required management to make significant estimates in determining the fair value of assets acquired and liabilities assumed, especially with respect to intangible assets. These estimates included, but were not limited to:
•future expected cash flows from subscription contracts and acquired developed technologies;
JAMF HOLDING CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
•historical and expected customer attrition rates and anticipated growth in revenue;
•royalty rates applied to acquired developed technology platforms;
•obsolescence curves and other useful life assumptions, such as the period of time and intended use of acquired intangible assets in the Company’s product offerings;
•discount rates; and
•uncertain tax positions and tax-related valuation allowances.
During the second quarter of 2022, the Company finalized its purchase accounting for the Wandera acquisition. The following table summarizes the final allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed and reflects all measurement period adjustments (in thousands):
| | | | | |
Assets acquired: | |
Cash and cash equivalents | $ | 9,605 | |
Trade accounts receivable, net | 3,882 | |
Prepaid expenses | 900 | |
Other current assets | 426 | |
Equipment and leasehold improvements, net | 58 | |
Intangible assets acquired | 102,050 | |
Operating lease assets | 1,474 | |
Deferred tax asset | 918 | |
Liabilities assumed: | |
Accounts payable | (788) | |
Accrued liabilities | (3,464) | |
Income taxes payable | (94) | |
Deferred revenue | (5,200) | |
Operating lease liabilities | (1,474) | |
Deferred tax liability | (9,374) | |
Goodwill | 310,356 | |
Total purchase consideration | $ | 409,275 | |
During the fourth quarter of 2021, the Company recorded measurement period adjustments including an increase to other current assets of $0.4 million and an increase to deferred tax assets of $0.1 million, resulting in a decrease to goodwill of $0.5 million. The adjustments related to new information obtained about facts and circumstances that existed as of the acquisition date. The increase to other current assets relates to UK refundable research and development tax credits.
The goodwill represents the excess of the purchase consideration over the fair value of the underlying net identifiable assets. The goodwill recognized in this acquisition is primarily attributable to expected synergies in sales opportunities across complementary products, customers, and geographies and cross-selling opportunities. The goodwill is not deductible for income tax purposes.
JAMF HOLDING CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
The estimated useful lives and fair values of the identifiable intangible assets acquired were as follows:
| | | | | | | | | | | |
| Useful Life | | Gross Value |
| | | (in thousands) |
Developed technology | 6.5 years | | $ | 60,500 | |
Customer relationships | 11.0 years | | 35,600 | |
Order backlog | 2.5 years | | 3,800 | |
Non-competes | 2.5 years | | 1,750 | |
Trademarks | 3.0 years | | 400 | |
Total identifiable intangible assets | | | $ | 102,050 | |
The weighted-average useful life of the intangible assets acquired is 7.8 years.
Developed technology represents the estimated fair value of the features underlying the Wandera products as well as the platform supporting Wandera customers. Customer relationships represent the estimated fair value of the underlying relationships with Wandera customers. Order backlog represents the estimated fair value of existing order backlog with Wandera customers. Non-competes represent the estimated fair value of non-compete agreements acquired from Wandera. Trademarks represent the estimated fair value of the Wandera brand.
cmdReporter
On February 26, 2021, the Company entered into an asset purchase agreement with cmdSecurity to acquire certain cmdSecurity assets, including cmdReporter, a suite of security and compliance tools purpose-built for macOS. The final aggregate purchase price was approximately $3.4 million, which consisted of cash consideration of $3.0 million and contingent consideration of $0.4 million. The purchase price was allocated to the assets acquired based on their estimated fair values as of the date of the acquisition. The allocation included $2.6 million to developed technology with an estimated useful life of 5.0 years and $0.4 million to IPR&D, with the remaining $0.4 million allocated to goodwill. The IPR&D was completed in the first quarter of 2022 and is amortized over its estimated useful life of 5.0 years.
Digita
In 2019, the Company recorded contingent consideration in connection with its purchase of the outstanding membership interests of Digita. The maximum contingent consideration is $15.0 million if the acquired business achieves certain revenue milestones by December 31, 2022. The acquired business achieved the minimum revenue milestones, which resulted in the Company making cash payments of $4.6 million and $4.2 million in the first quarter of 2022 and the second quarter of 2021, respectively, to the former owners of the acquired business. If the acquired business continues to achieve the revenue milestones, an additional cash payment will be made within 30 days of December 31, 2022. See Note 3 for more information on the fair value of the contingent consideration.
Note 5. Goodwill and other intangible assets
The change in the carrying amount of goodwill was as follows:
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2022 | | 2021 | | 2022 | | 2021 |
| (in thousands) |
Goodwill, beginning of period | $ | 841,984 | | | $ | 541,850 | | | $ | 845,734 | | | $ | 541,480 | |
Goodwill acquired | — | | | — | | | 3,014 | | | 370 | |
Foreign currency translation adjustment | (18,313) | | | — | | | (25,077) | | | — | |
Goodwill, end of period | $ | 823,671 | | | $ | 541,850 | | | $ | 823,671 | | | $ | 541,850 | |
JAMF HOLDING CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
The gross carrying amount and accumulated amortization of intangible assets other than goodwill were as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| June 30, 2022 |
| Useful Life | | Gross Value | | Accumulated Amortization | | Net Carrying Value | | Weighted‑ Average Remaining Useful Life |
| (in thousands) |
Trademarks | 3 - 8 years | | $ | 34,652 | | | $ | 19,988 | | | $ | 14,664 | | | 3.3 years |
Customer relationships | 2 ‑ 12 years | | 247,507 | | | 86,183 | | | 161,324 | | | 7.8 years |
Developed technology | 5 - 6.5 years | | 111,415 | | | 56,869 | | | 54,546 | | | 4.9 years |
Non‑competes | 2 - 3 years | | 1,588 | | | 649 | | | 939 | | | 1.6 years |
Order backlog | 2.5 years | | 3,533 | | | 1,449 | | | 2,084 | | | 1.5 years |
Total intangible assets | | | $ | 398,695 | | | $ | 165,138 | | | $ | 233,557 | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| December 31, 2021 |
| Useful Life | | Gross Value | | Accumulated Amortization | | Net Carrying Value | | Weighted‑ Average Remaining Useful Life |
| (in thousands) |
Trademarks | 3 - 8 years | | $ | 34,690 | | | $ | 17,788 | | | $ | 16,902 | | | 3.8 years |
Customer relationships | 2 ‑ 12 years | | 249,495 | | | 75,600 | | | 173,895 | | | 8.3 years |
Developed technology | 5 - 6.5 years | | 116,193 | | | 47,142 | | | 69,051 | | | 5.1 years |
Non‑competes | 2 - 2.5 years | | 1,797 | | | 439 | | | 1,358 | | | 2.0 years |
Order backlog | 2.5 years | | 3,745 | | | 758 | | | 2,987 | | | 2.0 years |
Total intangible assets subject to amortization | | | 405,920 | | | 141,727 | | | 264,193 | | | |
IPR&D | Indefinite | | 400 | | | — | | | 400 | | | |
Total intangible assets | | | $ | 406,320 | | | $ | 141,727 | | | $ | 264,593 | | | |
The gross value in the tables above includes a cumulative foreign currency translation adjustment of $(10.4) million and $(2.1) million as of June 30, 2022 and December 31, 2021, respectively. The accumulated amortization in the table above includes a cumulative foreign currency translation adjustment of $(1.0) million as of June 30, 2022. The cumulative foreign currency translation adjustment for accumulated amortization was not material as of December 31, 2021.
Amortization expense was $12.3 million and $8.5 million for the three months ended June 30, 2022 and 2021, respectively, and $24.5 million and $16.9 million for the six months ended June 30, 2022 and 2021, respectively.
There were no impairments to goodwill during the three and six months ended June 30, 2022 and 2021. There were no material impairments to intangible assets during the three and six months ended June 30, 2022 and 2021.
JAMF HOLDING CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
Note 6. Leases
Supplemental balance sheet information related to the Company’s operating leases is as follows:
| | | | | | | | | | | | | | | | | | | | |
Leases | | Balance Sheet Classification | | June 30, 2022 | | December 31, 2021 |
| | | | (in thousands) |
Assets | | | | | | |
Operating lease assets | | Other assets | | $ | 27,100 | | | $ | 21,600 | |
| | | | | | |
Liabilities | | | | | | |
Operating lease liabilities - current | | Accrued liabilities | | $ | 5,951 | | | $ | 5,251 | |
Operating lease liabilities - non-current | | Other liabilities | | 23,829 | | | 20,086 | |
Total operating lease liabilities | | | | $ | 29,780 | | | $ | 25,337 | |
Maturities of the Company’s operating lease liabilities as of June 30, 2022 were as follows:
| | | | | | | | |
| | Operating Leases |
| | (in thousands) |
Years ending December 31: | | |
2022 (remaining six months) | | $ | 3,268 | |
2023 | | 7,204 | |
2024 | | 6,208 | |
2025 | | 4,581 | |
2026 | | 4,585 | |
Thereafter | | 7,148 | |
Total lease payments | | 32,994 | |
Less: imputed interest | | 3,214 | |
Total present value of lease liabilities | | $ | 29,780 | |
Note 7. Commitments and contingencies
Hosting Services and Other Support Software Agreements
In the second quarter of 2022, the Company entered into an amended contractual agreement with an unrelated party for hosting services, which includes a non-cancelable commitment of $100.0 million over the next three years. Any remaining commitments under the prior agreement were terminated upon the commencement date of the amended agreement.
Contingencies
From time to time, the Company may be subject to various claims, charges, and litigation. The Company records a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Company maintains insurance to cover certain actions and believes that resolution of such claims, charges, or litigation will not have a material impact on the Company’s financial position, results of operations, or liquidity. The Company had no liabilities for contingencies as of June 30, 2022 or December 31, 2021.
JAMF HOLDING CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
Note 8. Debt
Convertible Senior Notes
On September 17, 2021, the Company issued $373.8 million aggregate principal amount of 0.125% 2026 Notes in a private offering. As of June 30, 2022, the conditions allowing holders of the 2026 Notes to convert were not met.
The following table sets forth the interest expense related to the 2026 Notes for the periods presented:
| | | | | | | | | | | |
| Three Months Ended June 30, 2022 | | Six Months Ended June 30, 2022 |
| (in thousands) |
Contractual interest expense | $ | 117 | | | $ | 234 | |
Amortization of issuance costs | 617 | | | 1,234 | |
The effective interest rate on the 2026 Notes was 0.81% for the three and six months ended June 30, 2022. See Note 3 for additional information on the Company’s 2026 Notes.
Credit Agreement
The 2020 Credit Agreement provides for the 2020 Revolving Credit Facility of $150.0 million, which may be increased or decreased under specific circumstances, with a $25.0 million letter of credit sublimit and a $50.0 million alternative currency sublimit. In addition, the 2020 Credit Agreement provides for the ability of the Company to request incremental term loan facilities, in a minimum amount of $5.0 million for each facility. The maturity date of the 2020 Credit Agreement is July 27, 2025. The 2020 Credit Agreement contains customary representations and warranties, affirmative covenants, reporting obligations, negative covenants, and events of default. We were in compliance with such covenants as of both June 30, 2022 and December 31, 2021. As of both June 30, 2022 and December 31, 2021, we had $1.0 million of letters of credit outstanding under our 2020 Revolving Credit Facility.
As of June 30, 2022 and December 31, 2021, debt issuance costs related to the 2020 Credit Agreement of $0.8 million and $0.9 million, respectively, are included in other assets in the condensed consolidated balance sheets.
In connection with the closing of the Wandera acquisition on July 1, 2021, the Company entered into the Credit Agreement Amendment, which amended the Company’s 2020 Credit Agreement. The Credit Agreement Amendment provided for the 2021 Term Loan Facility, a new 364-day term loan facility in an aggregate principal amount of $250.0 million on substantially the same terms and conditions as the Company’s existing 2020 Revolving Credit Facility. The Company repaid the principal amount of the 2021 Term Loan Facility on September 23, 2021 with proceeds from the issuance and sale of the 2026 Notes.
Note 9. Share-based compensation
The Company’s equity incentive plans provide for granting various share-based awards to eligible employees, non-employee directors, and consultants of the Company. In addition, the Company offers an employee stock purchase plan to eligible employees.
JAMF HOLDING CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
The Company recognized stock-based compensation expense for all equity arrangements as follows:
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2022 | | 2021 | | 2022 | | 2021 |
| (in thousands) |
Cost of revenue: | | | | | | | |
Subscription | $ | 2,061 | | | $ | 344 | | | $ | 4,016 | | | $ | 668 | |
Services | 313 | | | 75 | | | 617 | | | 152 | |
Sales and marketing | 13,811 | | | 1,088 | | | 19,670 | | | 1,930 | |
Research and development | 10,631 | | | 1,153 | | | 14,490 | | | 1,931 | |
General and administrative | 26,208 | | | 1,446 | | | 30,241 | | | 2,257 | |
| $ | 53,024 | | | $ | 4,106 | | | $ | 69,034 | | | $ | 6,938 | |
Equity Incentive Plans
The maximum number of shares of common stock available for issuance under the 2020 Plan was 24,256,740 shares as of January 1, 2022. As of June 30, 2022, 14,143,905 shares of common stock are reserved for additional grants under the 2020 Plan. As of June 30, 2022, 128,928 shares of common stock are reserved for additional grants under the 2017 Option Plan. All stock options previously granted by the Company were at an exercise price at or above the estimated fair market value of the Company’s common stock as of the grant date. No options were granted during the six months ended June 30, 2022.
Return Target Options
The table below summarizes return target option activity for the six months ended June 30, 2022:
| | | | | | | | | | | | | | | | | | | | | | | |
| Options | | Weighted‑ Average Exercise Price | | Weighted‑ Average Remaining Contractual Term (Years) | | Aggregate Intrinsic Value (in thousands) |
Outstanding, December 31, 2021 | 3,687,664 | | | $ | 6.75 | | | 6.8 | | $ | 115,278 | |
Granted | — | | | — | | | | | — | |
Exercised | (16,229) | | | 5.49 | | | | | 318 | |
Forfeitures | — | | | — | | | | | — | |
Outstanding, June 30, 2022 | 3,671,435 | | | $ | 6.76 | | | 6.3 | | $ | 66,140 | |
Options exercisable at June 30, 2022 | 3,671,435 | | | $ | 6.76 | | | 6.3 | | $ | 66,140 | |
Vested or expected to vest at June 30, 2022 | 3,671,435 | | | $ | 6.76 | | | 6.3 | | $ | 66,140 | |
The aggregate intrinsic value in the table above represents the total intrinsic value that would have been received by the optionholders had all optionholders exercised their options on the last day of the period. The return target options outstanding on June 27, 2022 were modified such that these options were deemed fully vested as of June 30, 2022. This modification resulted in the recognition of $33.0 million of stock-based compensation expense during the three months ended June 30, 2022. There is no remaining unrecognized compensation expense related to these return target options as of June 30, 2022. The total fair value of return target options vested during the six months ended June 30, 2022 was $33.0 million.
JAMF HOLDING CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
Service-Based Options
The table below summarizes the service-based option activity for the six months ended June 30, 2022:
| | | | | | | | | | | | | | | | | | | | | | | |
| Options | | Weighted‑ Average Exercise Price | | Weighted‑ Average Remaining Contractual Term (Years) | | Aggregate Intrinsic Value (in thousands) |
Outstanding, December 31, 2021 | 1,643,266 | | | $ | 5.68 | | | 6.1 | | $ | 53,129 | |
Granted | — | | | — | | | | | — | |
Exercised | (254,544) | | | 5.71 | | | | | 7,937 | |
Forfeitures | — | | | — | | | | | — | |
Outstanding, June 30, 2022 | 1,388,722 | | | $ | 5.67 | | | 5.6 | | $ | 26,520 | |
Options exercisable at June 30, 2022 | 1,273,921 | | | $ | 5.51 | | | 5.4 | | $ | 24,533 | |
Vested or expected to vest at June 30, 2022 | 1,388,722 | | | $ | 5.67 | | | 5.6 | | $ | 26,520 | |
The aggregate intrinsic value in the table above represents the total intrinsic value that would have been received by the optionholders had all optionholders exercised their options on the last date of the period. Service-based options vest over four years with 25% vesting one year after grant and the remainder vesting ratably on a quarterly basis thereafter. The total fair value of service-based options vested during the six months ended June 30, 2022 was $0.4 million. There was $0.6 million of unrecognized compensation expense related to service-based options that is expected to be recognized over a weighted-average period of 1.2 years as of June 30, 2022. The Company issues new shares when service-based options are exercised. All service-based options outstanding under the Company’s option plans have exercise prices equal to the fair value of the Company’s stock on the grant date. All awards expire after 10 years.
Restricted Stock Units
RSU activity for the six months ended June 30, 2022 was as follows:
| | | | | | | | | | | |
| Units | | Weighted-Average Grant Date Fair Value (per share) |
Outstanding, December 31, 2021 | 6,890,938 | | | $ | 31.59 | |
Granted | 2,978,456 | | | 29.12 | |
Vested | (482,760) | | | 34.57 | |
Forfeited | (286,591) | | | 30.82 | |
Outstanding, June 30, 2022 | 9,100,043 | | | $ | 30.64 | |
RSUs under the 2020 Plan generally vest ratably over four years. There was $240.5 million of unrecognized compensation expense related to unvested RSUs that is expected to be recognized over a weighted-average period of 3.3 years as of June 30, 2022. The total fair value of RSUs vested during the six months ended June 30, 2022 was $16.7 million.
Long-Term Incentive Plan
In the third quarter of 2021, the Company offered employees with LTIP grants the opportunity to convert those awards into RSUs under the 2020 Plan. Upon conversion, 50% of the RSUs vested immediately and the remaining 50% vest on the one year anniversary of the grant date, provided the employee remains continuously employed by the Company through the vesting date. All employees elected to convert their outstanding LTIP grants into RSUs, resulting in grants totaling 413,234 shares.
The conversion of the previously outstanding LTIP grants into RSUs resulted in the recognition of $3.2 million of stock-based compensation expense during the six months ended June 30, 2022. The expense on the unvested RSUs is recognized on a straight-line basis over the vesting period.
JAMF HOLDING CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
Employee Stock Purchase Plan
As of June 30, 2022, the Company has withheld, at the employees’ request, $1.3 million of eligible employee compensation, which is included in accrued liabilities in the condensed consolidated balance sheet, for purchases of common stock under the 2021 ESPP.
As of June 30, 2022, 4,063,810 shares of common stock are reserved for future issuance under the 2021 ESPP. During the six months ended June 30, 2022, the Company’s employees purchased 130,450 shares of common stock under the 2021 ESPP at a purchase price of $26.18 per share. Total proceeds to the Company were $3.4 million during the six months ended June 30, 2022.
The average grant date fair value for the offering period under the 2021 ESPP that commenced on May 2, 2022 was $9.22 per share. The Company used the following assumptions in the Black-Scholes option pricing model to estimate the fair value:
| | | | | |
| Three and Six Months Ended June 30, 2022 |
Expected term | 0.5 years |
Expected volatility | 60.05% |
Risk-free interest rate | 1.49% |
Expected dividend yield | —% |
There was $0.9 million of unrecognized compensation expense related to the 2021 ESPP that is expected to be recognized over a period of four months as of June 30, 2022.
Note 10. Net loss per share
The following table sets forth the computation of basic and diluted net loss per share:
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2022 | | 2021 | | 2022 | | 2021 |
| (in thousands, except share and per share amounts) |
Numerator: | | | | | | | |
Net loss | $ | (63,139) | | | $ | (16,467) | | | $ | (88,768) | | | $ | (21,056) | |
Denominator: | | | | | | | |
Weighted-average shares used to compute net loss per share, basic and diluted | 119,941,482 | | | 117,909,720 | | | 119,768,871 | | | 117,649,467 | |
Basic and diluted net loss per share | $ | (0.53) | | | $ | (0.14) | | | $ | (0.74) | | | $ | (0.18) | |
Basic net loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding for the period. Because we have reported a net loss for the three and six months ended June 30, 2022 and 2021, the number of shares used to calculate diluted net loss per common share is the same as the number of shares used to calculate basic net loss per common share because the potentially dilutive shares would have been antidilutive if included in the calculation.
JAMF HOLDING CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
The following potentially dilutive securities outstanding have been excluded from the computation of diluted weighted-average shares outstanding because such securities have an antidilutive impact due to losses reported:
| | | | | | | | | | | |
| As of June 30, |
| 2022 | | 2021 |
Stock options outstanding | 5,060,157 | | | 5,977,050 | |
Unvested restricted stock units | 9,100,043 | | | 3,093,800 | |
Shares related to the 2026 Notes | 7,475,897 | | | — | |
Shares committed under the 2021 ESPP | 188,533 | | | — | |
Total potentially dilutive securities | 21,824,630 | | | 9,070,850 | |
Note 11. Income taxes
The Company’s effective tax rates for the three months ended June 30, 2022 and 2021 were 0.0% and 0.4%, respectively. The effective tax rate for the three months ended June 30, 2022 differs from the statutory rate primarily as a result of valuation allowances. The effective tax rate for the three months ended June 30, 2022 was impacted by $0.9 million of discrete income tax expense. The Company’s annual effective tax rates for the three months ended June 30, 2022 and 2021 were 1.4% and (0.5)%, respectively.
The Company’s effective tax rate for both the six months ended June 30, 2022 and 2021 was (0.3)%. The effective tax rate for the six months ended June 30, 2022 differs from the statutory rate primarily as a result of valuation allowances. The effective tax rate for the six months ended June 30, 2022 was impacted by $1.5 million of discrete income tax expense.
Note 12. Related party transactions
As of June 30, 2022 and December 31, 2021, the Company accrued $0.8 million and $1.5 million, respectively, related to JNGF pledges, which are included in accrued liabilities in the condensed consolidated balance sheets. The Company may engage in transactions in the ordinary course of business with significant shareholders or other companies whose directors or officers may also serve as directors or officers for the Company. The Company carries out these transactions on customary terms.
Vista is a U.S.-based investment firm that controls the funds which previously owned a majority of the Company. In 2021, Vista sold a portion of its investment in the Company such that its funds no longer owned a majority of the Company as of June 30, 2022. However, Vista is deemed a related party in accordance with ASC 850 as it continues to be a principal owner of the Company. There were no material transactions with Vista or its affiliates during the three and six months ended June 30, 2022 and 2021.
Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements that are subject to risks and uncertainties. All statements other than statements of historical fact included in this Quarterly Report on Form 10-Q are forward-looking statements. 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. For example, all statements we make relating to our estimated and projected costs, expenditures, cash flows, growth rates, and financial results or our plans and objectives for future operations, growth initiatives, or strategies are forward-looking statements. 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 from macroeconomic and market conditions, including heightened inflation, slower growth or recession, changes to fiscal and monetary policy, higher interest rates, currency fluctuations, challenges in the supply chain, and the effects of the ongoing 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 and other third parties 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;
•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 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 meet service-level commitments under our subscription agreements;
•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 acquisitions and divestitures (such as our acquisition of Wandera);
•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;
•our ability to attract and retain highly qualified personnel;
•risks associated with competitive challenges faced by our customers;
•the impact of our often long and unpredictable sales cycle;
•the risks associated with sales to new and existing enterprise customers;
•our ability to develop and expand our marketing and sales capabilities;
•the risks associated with free trials and other inbound, lead-generation sales strategies;
•the risks associated with indemnity provisions in our contracts;
•our management team’s limited experience managing a public company;
•risks associated with cyber-security events;
•the impact of real or perceived errors, failures, or bugs in our products;
•the impact of general disruptions to data transmission;
•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 risks associated with intellectual property infringement, misappropriation, or other claims;
•our reliance on third-party software and intellectual property licenses;
•our ability to obtain, protect, enforce, and maintain our intellectual property and proprietary rights;
•the risks associated with our use of open source software in our products;
•risks related to our indebtedness, including our ability to raise the funds necessary to settle conversions of our convertible senior notes, repurchase our convertible senior notes upon a fundamental change, or repay our convertible senior notes in cash at their maturity;
•risks associated with global events (such as Russia’s invasion of Ukraine and related sanctions); and
•other factors disclosed in the section entitled “Risk Factors” and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2021, as supplemented by our subsequent Quarterly Reports on Form 10-Q.
We derive many of our forward-looking statements from our operating budgets and forecasts, which are based on many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results. Important factors that could cause actual results to differ materially from our expectations, or cautionary statements, are disclosed under “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K and “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our subsequent Quarterly Reports on Form 10-Q. All written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by these cautionary statements as well as other cautionary statements that are made from time to time in our other SEC filings and public communications. You should evaluate all forward-looking statements in the context of these risks and uncertainties.
We caution you that the important factors referenced above may not contain all of the factors that are important to you. In addition, we cannot assure you that we will realize the results or developments we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our operations in the way we expect. The forward-looking statements included in this Quarterly Report on Form 10-Q are made only as of the date hereof. We undertake 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.