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jamf-20210630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________________________________

FORM 10-Q

_________________________________________________


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the quarterly period ended June 30, 2021


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the transition period from to

Commission File Number: 001-39399

https://cdn.kscope.io/05f3a8fd18229fb4e9aa16dcfe1cc082-jamf-20210630_g1.jpg

JAMF HOLDING CORP.

(Exact name of registrant as specified in its charter)


Delaware (State or Other Jurisdiction of Incorporation or Organization)						82-3031543 (I.R.S. Employer Identification No.)

100 Washington Ave S, Suite 1100

Minneapolis, MN 55401

(Address of principal executive offices)

(612) 605-6625

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol	Name of each exchange on which registered
Common Stock, $0.001 par value per share	JAMF	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ☐	Accelerated filer ☐	Non-accelerated filer ☒
Smaller reporting company ☐		Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

On August 12, 2021, the Registrant had 118,653,414 shares of common stock, $0.001 par value, outstanding.

Table of Contents

Jamf Holding Corp.

INDEX


		PAGE
PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)	3

	Consolidated Balance Sheets as of June 30, 2021 and December 31, 2020	3

	Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2021 and 2020	4

	Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2021 and 2020	5

	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2021 and 2020	6

	Notes to Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	48

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	66

Item 4.	Controls and Procedures	67

PART II.	OTHER INFORMATION	68

Item 1.	Legal Proceedings	68

Item 1A.	Risk Factors	68

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	70

Item 3.	Defaults Upon Senior Securities	70

Item 4.	Mine Safety Disclosures	70

Item 5.	Other Information	71

Item 6.	Exhibits	72

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

JAMF HOLDING CORP.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)


	June 30, 2021		December 31, 2020 (1)
	(Unaudited)		(As Revised)
Assets
Current assets:
Cash and cash equivalents	$	226,485	$	194,868
Trade accounts receivable, net of allowances of $480 and $530 at June 30, 2021 and December 31, 2020, respectively	66,667		69,056
Income taxes receivable	565		632
Deferred contract costs	10,480		8,284
Prepaid expenses	14,432		13,283
Other current assets	2,687		1,113
Total current assets	321,316		287,236
Equipment and leasehold improvements, net	17,223		15,130
Goodwill	541,850		541,480
Other intangible assets, net	189,021		202,878
Deferred contract costs, non-current	25,993		22,202
Other assets	28,112		5,359
Total assets	$	1,123,515	$	1,074,285
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	9,037	$	6,967
Accrued liabilities	38,263		31,916
Income taxes payable	417		713
Deferred revenues	180,707		160,002
Total current liabilities	228,424		199,598
Deferred revenues, non-current	57,750		45,507
Deferred tax liability, net	4,306		5,087
Other liabilities	29,076		13,079
Total liabilities	319,556		263,271
Commitments and contingencies (Note 8)
Stockholders’ equity:
Preferred stock, $0.001 par value, 50,000,000 shares authorized at June 30, 2021 and December 31, 2020; no shares issued and outstanding at June 30, 2021 and December 31, 2020	—		—
Common stock, $0.001 par value, 500,000,000 shares authorized at June 30, 2021 and December 31, 2020; 118,249,912 and 116,992,472 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively	118		117
Additional paid‑in capital	917,116		903,116
Accumulated deficit	(113,275)		(92,219)
Total stockholders’ equity	803,959		811,014
Total liabilities and stockholders’ equity	$	1,123,515	$	1,074,285

(1) Certain prior period amounts have been revised to correct immaterial errors. See Note 1 for more information.

The accompanying notes are an integral part of these consolidated financial statements.

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JAMF HOLDING CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share amounts)

(unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020 (1)		2021 (2)		2020 (1)
			(As Revised)				(As Revised)
Revenue:
Subscription	$	80,718	$	58,600	$	155,200	$	112,804
Services	3,929		2,632		7,932		6,719
License	1,591		1,032		3,833		2,794
Total revenue	86,238		62,264		166,965		122,317
Cost of revenue:
Cost of subscription (exclusive of amortization expense shown below)	13,875		8,740		25,889		17,988
Cost of services (exclusive of amortization expense shown below)	2,607		2,210		5,072		5,300
Amortization expense	2,860		2,678		5,637		5,355
Total cost of revenue	19,342		13,628		36,598		28,643
Gross profit	66,896		48,636		130,367		93,674
Operating expenses:
Sales and marketing	32,617		20,781		62,784		43,785
Research and development	17,203		11,949		32,829		24,587
General and administrative	27,508		6,528		43,752		17,743
Amortization expense	5,623		5,634		11,250		11,308
Total operating expenses	82,951		44,892		150,615		97,423
Income (loss) from operations	(16,055)		3,744		(20,248)		(3,749)
Interest expense, net	(167)		(4,690)		(222)		(9,468)
Foreign currency transaction loss	(308)		(13)		(526)		(317)
Other income, net	—		36		—		91
Loss before income tax (provision) benefit	(16,530)		(923)		(20,996)		(13,443)
Income tax (provision) benefit	63		89		(60)		3,113
Net loss	$	(16,467)	$	(834)	$	(21,056)	$	(10,330)
Net loss per share, basic and diluted	$	(0.14)	$	(0.01)	$	(0.18)	$	(0.10)
Weighted‑average shares used to compute net loss per share, basic and diluted	117,909,720		102,862,404		117,649,467		102,861,475

(1) Certain prior period amounts have been revised to correct immaterial errors. See Note 1 for more information.

(2) Includes the three months ended March 31, 2021, which has been revised to correct immaterial errors. See Note 1 for more information.

The accompanying notes are an integral part of these consolidated financial statements.

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JAMF HOLDING CORP.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except share amounts)

(unaudited)


	Stock Class			Additional Paid‑In Capital		Accumulated Deficit (1)		Stockholders’ Equity (1)
	Common
	Shares	Amount
						(As Revised)		(As Revised)
Three Months Ended June 30, 2021:

Balance, March 31, 2021	117,705,895	$	118	$	909,966	$	(96,808)	$	813,276
Exercise of stock options	544,017	—		3,044		—		3,044
Share‑based compensation	—	—		4,106		—		4,106
Net loss	—	—		—		(16,467)		(16,467)
Balance, June 30, 2021	118,249,912	$	118	$	917,116	$	(113,275)	$	803,959

Three Months Ended June 30, 2020:

Balance, March 31, 2020	102,862,404	$	103	$	569,670	$	(77,633)	$	492,140
Share‑based compensation	—	—		764		—		764
Net loss	—	—		—		(834)		(834)
Balance, June 30, 2020	102,862,404	$	103	$	570,434	$	(78,467)	$	492,070

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

Six Months Ended June 30, 2020:

Balance, December 31, 2019	102,843,612	$	103	$	568,756	$	(68,137)	$	500,722
Exercise of stock options	18,792	—		103		—		103
Share‑based compensation	—	—		1,575		—		1,575
Net loss	—	—		—		(10,330)		(10,330)
Balance, June 30, 2020	102,862,404	$	103	$	570,434	$	(78,467)	$	492,070

(1) Certain prior period amounts have been revised to correct immaterial errors. See Note 1 for more information.

The accompanying notes are an integral part of these consolidated financial statements.

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JAMF HOLDING CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)


	Six Months Ended June 30,
	2021 (1)		2020 (2)
			(As Revised)
Cash flows from operating activities
Net loss	$	(21,056)	$	(10,330)
Adjustments to reconcile net loss to cash provided by operating activities:
Depreciation and amortization expense	19,538		19,170
Amortization of deferred contract costs	5,861		3,452
Amortization of debt issuance costs	249		571
Non-cash lease expense	2,398		—
Provision for bad debt expense and returns	(41)		812
Share‑based compensation	6,938		1,575
Deferred tax benefit	(669)		(3,082)
Adjustment to contingent consideration	4,237		(3,700)
Other	454		(156)
Changes in operating assets and liabilities:
Trade accounts receivable	2,249		(7,316)
Income tax receivable/payable	(238)		(278)
Prepaid expenses and other assets	(2,986)		928
Deferred contract costs	(11,848)		(8,035)
Accounts payable	2,284		202
Accrued liabilities	(1,889)		(2,371)
Deferred revenue	32,627		16,833
Other liabilities	(86)		1,240
Net cash provided by operating activities	38,022		9,515
Cash flows from investing activities
Acquisition, net of cash acquired	(3,041)		—
Purchases of equipment and leasehold improvements	(5,211)		(1,366)
Proceeds from sale of equipment and leasehold improvements	22		—
Net cash used in investing activities	(8,230)		(1,366)
Cash flows from financing activities
Debt issuance costs	(530)		—
Cash paid for offering costs	(243)		(2,203)
Cash paid for contingent consideration	(4,206)		—
Proceeds from the exercise of stock options	7,063		103
Net cash provided by (used in) financing activities	2,084		(2,100)
Effect of exchange rate changes on cash and cash equivalents	(259)		—
Net increase in cash and cash equivalents	31,617		6,049
Cash and cash equivalents, beginning of period	194,868		32,375
Cash and cash equivalents, end of period	$	226,485	$	38,424
Supplemental disclosures of cash flow information:
Cash paid for interest	$	6	$	9,262
Cash paid for income taxes, net of refunds	832		411
Offering costs accrued but not paid	300		2,865
Operating lease assets obtained in exchange for operating lease liabilities	(19)		—

(1) Includes the three months ended March 31, 2021, which has been revised to correct immaterial errors. See Note 1 for more information.

(2) Certain prior period amounts have been revised to correct immaterial errors. See Note 1 for more information.

The accompanying notes are an integral part of these consolidated financial statements.

Table of Conten ts

JAMF HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Note 1. Basis of presentation and description of business

Description of business

Jamf Holding Corp. and its wholly owned subsidiaries, collectively, are referred to as the “Company,” “we,” “us” or “our.” 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 organizations connect, manage and protect Apple products, apps and corporate resources in the cloud without ever having to touch the devices. With our products, Apple devices can be deployed to employees brand new in the shrink-wrapped box, automatically set up and personalized at first power-on and continuously administered throughout the life of the device. Our customers are located throughout the world.

Vista Equity Partners acquisition

On November 13, 2017, Vista Equity Partners (“Vista”) acquired a majority share of all the issued and outstanding shares of the Company at the purchase price of $733.8 million (the “Vista Acquisition”). As of June 30, 2021, funds controlled by Vista owned approximately 53.5% of our outstanding common stock. As a result, we are a “controlled company” under NASDAQ Global Select Market (“NASDAQ”) corporate governance rules.

Emerging growth company status

We are currently an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act, until such time as those standards apply to private companies.

We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it is (i) no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.

On June 30, 2021, the last day of our second fiscal quarter in 2021, the market value of our common stock held by non-affiliates exceeded $700.0 million. Accordingly, we will be deemed a large accelerated filer as of December 31, 2021 and will no longer qualify as an emerging growth company and be able to take advantage of the extended timeline to comply with new or revised accounting standards applicable to public companies beginning with our Annual Report on Form 10-K for the year ending December 31, 2021.

Unaudited interim consolidated financial information

The accompanying interim consolidated balance sheet as of June 30, 2021, the consolidated statements of operations and of stockholders’ equity for the three and six months ended June 30, 2021 and 2020 and the consolidated statements of cash flows for the six months ended June 30, 2021 and 2020 and the related footnote disclosures are unaudited. These unaudited interim 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. Except for the revision discussed below, all adjustments made were of a normal recurring nature. The results for the three and six months ended June 30, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any future period.

Basis of presentation

The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Certain reclassifications of prior period amounts have been made to conform to the current presentation. In the fourth quarter of 2020, the Company reclassified on-premise subscription revenue from license revenue to subscription revenue in the consolidated statements of operations on a retroactive basis. The amount reclassified for the three

Table of Contents

JAMF HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

and six months ended June 30, 2020 was $5.8 million and $10.3 million, respectively. The revised presentation is consistent with our disaggregated revenue disclosure and is more consistent with how investors and other users of the financial statements evaluate overall subscription revenue. The reclassification had no impact on total revenue.

Revision of previously issued consolidated financial statements

In connection with the preparation of its financial statements for the quarter ended June 30, 2021, the Company identified immaterial errors related to certain commissions that were incorrectly capitalized in prior periods. The commissions, as well as the associated payroll taxes and retirement plan contributions, were not incremental to the acquisition of customer contracts and should have been expensed as incurred in accordance with GAAP, rather than capitalized. As a result, sales and marketing expenses were understated and deferred contract costs were overstated by $2.5 million, $2.0 million, $1.8 million and $0.8 million for the years ended December 31, 2020, 2019 and 2018 and the three months ended March 31, 2021, respectively.

In accordance with Staff Accounting Bulletin (“SAB”) No. 99, Materiality and SAB No. 108, Considering the Effects of Prior Year Misstatements When Quantifying Misstatements in Current Year Financial Statements, the Company evaluated the materiality of this error both quantitatively and qualitatively and determined that it was not material to our previously issued consolidated financial statements. However, adjusting for the cumulative effect of this error in the consolidated statement of operations for 2021 would be material to the Company’s results for this period as the cumulative amount of the error increased over time. As such, the Company has revised its previously issued consolidated financial statements as of and for the years ended December 31, 2020, 2019 and 2018 and its unaudited consolidated financial statements as of and for the quarter ended March 31, 2021 and quarters and year-to-date periods ended June 30, 2020 and September 30, 2020 to correct the error.

The revisions also include the corrections of other immaterial errors that the Company had previously recorded as out-of-period adjustments in the period of identification, as well as other previously identified immaterial errors. The previously recorded out-of-period adjustments included the establishment of state valuation allowances, as well as other immaterial errors. The Company had previously determined that these errors did not, both individually and in the aggregate, result in a material misstatement of our previously issued consolidated financial statements and reached the same conclusion when aggregating these immaterial errors with the commissions error described above.

The accompanying financial statements and relevant footnotes to the consolidated financial statements in this Quarterly Report on Form 10-Q have been revised to correct for the immaterial errors discussed above. The tables below provide reconciliations of our previously reported amounts to revised amounts to correct for these immaterial errors in our consolidated financial statements as of and for the years ended December 31, 2020, 2019 and 2018 and our unaudited consolidated financial statements as of and for the quarter ended March 31, 2021 and as of and for the quarter and year-to-date periods ended June 30, 2020.

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JAMF HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)


	December 31, 2020
	As Previously Reported		Adjustments				As Revised
			Commissions		Other
	(in thousands)
Assets
Current assets:
Cash and cash equivalents	$	194,868	$	—	$	—	$	194,868
Trade accounts receivable, net of allowances	69,056		—		—		69,056
Income taxes receivable	632		—		—		632
Deferred contract costs	9,959		(1,675)		—		8,284
Prepaid expenses	13,283		—		—		13,283
Other current assets	1,113		—		—		1,113
Total current assets	288,911		(1,675)		—		287,236
Equipment and leasehold improvements, net	12,755		—		2,375		15,130
Goodwill	541,480		—		—		541,480
Other intangible assets, net	202,878		—		—		202,878
Deferred contract costs, non-current	26,770		(4,568)		—		22,202
Other assets	5,359		—		—		5,359
Total assets	$	1,078,153	$	(6,243)	$	2,375	$	1,074,285
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	6,967	$	—	$	—	$	6,967
Accrued liabilities	31,574		—		342		31,916
Income taxes payable	713		—		—		713
Deferred revenues	160,443		—		(441)		160,002
Total current liabilities	199,697		—		(99)		199,598
Deferred revenues, non-current	45,507		—		—		45,507
Deferred tax liability, net	6,422		(1,535)		200		5,087
Other liabilities	11,046		—		2,033		13,079
Total liabilities	262,672		(1,535)		2,134		263,271
Commitments and contingencies
Stockholders’ equity:
Preferred stock	—		—		—		—
Common stock	117		—		—		117
Additional paid‑in capital	903,116		—		—		903,116
Accumulated deficit	(87,752)		(4,708)		241		(92,219)
Total stockholders’ equity	815,481		(4,708)		241		811,014
Total liabilities and stockholders’ equity	$	1,078,153	$	(6,243)	$	2,375	$	1,074,285

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JAMF HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)


	Year Ended December 31, 2020
	As Previously Reported		Adjustments				As Revised
			Commissions		Other
	(in thousands, except share and per share amounts)
Revenue:
Subscription	$	249,192	$	—	$	(313)	$	248,879
Services	14,525		—		(6)		14,519
License	5,734		—		—		5,734
Total revenue	269,451		—		(319)		269,132
Cost of revenue:
Cost of subscription (exclusive of amortization expense shown below)	39,323		—		206		39,529
Cost of services (exclusive of amortization expense shown below)	10,712		—		14		10,726
Amortization expense	10,753		—		—		10,753
Total cost of revenue	60,788		—		220		61,008
Gross profit	208,663		—		(539)		208,124
Operating expenses:
Sales and marketing	96,251		2,497		137		98,885
Research and development	52,431		—		82		52,513
General and administrative	51,904		—		(301)		51,603
Amortization expense	22,575		—		—		22,575
Total operating expenses	223,161		2,497		(82)