SEC Filing | Jamf

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jamf-20220630

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, 2022


☐			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/595b7ca23aef2256dae018b772f9647e-jamf-20220630_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 July 27, 2022, the registrant had 120,689,645 shares of common stock, $0.001 par value, outstanding.

Table of Contents

JAMF HOLDING CORP.

TABLE OF CONTENTS


		PAGE
PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)	4
	Condensed Consolidated Balance Sheets — June 30, 2022 and December 31, 2021	4
	Condensed Consolidated Statements of Operations — Three and Six Months Ended June 30, 2022 and 2021	5
	Condensed Consolidated Statements of Comprehensive Loss — Three and Six Months Ended June 30, 2022 and 2021	6
	Condensed Consolidated Statements of Stockholders’ Equity — Three and Six Months Ended June 30, 2022 and 2021	7
	Condensed Consolidated Statements of Cash Flows — Six Months Ended June 30, 2022 and 2021	9
	Notes to Condensed Consolidated Financial Statements	10
	Note 1. Basis of presentation and description of business	10
	Note 2. Summary of significant accounting policies	11
	Note 3. Financial instruments fair value	13
	Note 4. Acquisitions	16
	Note 5. Goodwill and other intangible assets	18
	Note 6. Leases	20
	Note 7. Commitments and contingencies	20
	Note 8. Debt	21
	Note 9. Share-based compensation	21
	Note 10. Net loss per share	24
	Note 11. Income taxes	25
	Note 12. Related party transactions	25
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	46
Item 4.	Controls and Procedures	46

PART II.	OTHER INFORMATION	48
Item 1.	Legal Proceedings	48
Item 1A.	Risk Factors	48
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	48
Item 3.	Defaults Upon Senior Securities	48
Item 4.	Mine Safety Disclosures	48
Item 5.	Other Information	48
Item 6.	Exhibits	49

Signatures		50

Table of Contents

GLOSSARY

We use acronyms, abbreviations, and other defined terms throughout this quarterly report on Form 10-Q. These terms are defined below. Jamf Holding Corp. and its wholly owned subsidiaries, collectively, are referred to as the “Company,” “we,” “us,” or “our.”


Term						Definition
2017 Option Plan						2017 Stock Option Plan
2020 Credit Agreement						Credit agreement dated July 27, 2020, as amended, supplemented, or modified
2020 Plan						Jamf Holding Corp. Omnibus Incentive Plan
2020 Revolving Credit Facility						Revolving credit facility available under the 2020 Credit Agreement
2021 ESPP						Jamf Holding Corp. 2021 Employee Stock Purchase Plan
2021 Term Loan Facility						364-day term loan facility incurred under the Credit Agreement Amendment
2026 Notes						Convertible Senior Notes due 2026
ARR						Annual Recurring Revenue
AWS						Amazon Web Services
ASC 606						ASC Topic 606, Revenue from Contracts with Customers
ASC 805						ASC Topic 805, Business Combinations
ASC 820						ASC Topic 820, Fair Value Measurement
ASC 850						ASC Topic 850, Related Party Disclosures
ASU						Accounting Standards Update
cmdSecurity						cmdSecurity Inc.
CODM						Chief operating decision maker
Credit Agreement Amendment						Incremental Facility Amendment No. 1 to the 2020 Credit Agreement, dated July 1, 2021
Current Period ARR						ARR from the same cohort of customers used to calculate Prior Period ARR as of the current period end
Digita						Digita Security LLC
Exchange Act						The Securities Exchange Act of 1934, as amended
FASB						Financial Accounting Standards Board
GAAP						U.S. generally accepted accounting principles
IPR&D						In-process research and development
JNGF						Jamf Nation Global Foundation
LTIP						Long-term incentive plan
Merger Agreement						Agreement and Plan of Merger, dated as of May 5, 2021 in connection with the acquisition of Wandera
Prior Period ARR						ARR from the cohort of all customers as of 12 months prior to period end
RSU						Restricted stock unit
SEC						Securities and Exchange Commission
UK						United Kingdom
Vista						Vista Equity Partners, LLC and its affiliates
Wandera						Wandera, Inc.
ZTNA						Zero Trust Network Access

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

JAMF HOLDING CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)


	June 30, 2022		December 31, 2021
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	182,349	$	177,150
Trade accounts receivable, net of allowances of $479 and $391 at June 30, 2022 and December 31, 2021, respectively	96,450		79,143
Income taxes receivable	450		608
Deferred contract costs	15,460		12,904
Prepaid expenses	17,513		17,581
Other current assets	4,953		4,212
Total current assets	317,175		291,598
Equipment and leasehold improvements, net	17,334		18,045
Goodwill	823,671		845,734
Other intangible assets, net	233,557		264,593
Deferred contract costs, non-current	34,823		29,842
Other assets	39,530		30,608
Total assets	$	1,466,090	$	1,480,420
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	9,506	$	9,306
Accrued liabilities	50,761		54,022
Income taxes payable	203		167
Deferred revenues	249,374		223,031
Total current liabilities	309,844		286,526
Deferred revenues, non-current	67,578		59,097
Deferred tax liability, net	7,596		8,700
Convertible senior notes, net	363,265		362,031
Other liabilities	23,861		25,640
Total liabilities	772,144		741,994
Commitments and contingencies (Note 7)
Stockholders’ equity:
Preferred stock, $0.001 par value, 50,000,000 shares authorized at June 30, 2022 and December 31, 2021; no shares issued and outstanding at June 30, 2022 and December 31, 2021	—		—
Common stock, $0.001 par value, 500,000,000 shares authorized at June 30, 2022 and December 31, 2021; 120,310,047 and 119,426,064 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively	120		119
Additional paid‑in capital	987,576		913,581
Accumulated other comprehensive loss	(37,574)		(7,866)
Accumulated deficit	(256,176)		(167,408)
Total stockholders’ equity	693,946		738,426
Total liabilities and stockholders’ equity	$	1,466,090	$	1,480,420

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

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JAMF HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share amounts)

(unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Revenue:
Subscription	$	109,407	$	80,718	$	211,608	$	155,200
Services	5,027		3,929		8,971		7,932
License	1,204		1,591		3,317		3,833
Total revenue	115,638		86,238		223,896		166,965
Cost of revenue:
Cost of subscription (exclusive of amortization expense shown below)	20,634		13,875		40,536		25,889
Cost of services (exclusive of amortization expense shown below)	3,493		2,607		6,600		5,072
Amortization expense	5,265		2,860		10,483		5,637
Total cost of revenue	29,392		19,342		57,619		36,598
Gross profit	86,246		66,896		166,277		130,367
Operating expenses:
Sales and marketing	58,750		32,617		105,075		62,784
Research and development	33,983		17,203		58,785		32,829
General and administrative	48,321		27,508		73,933		43,752
Amortization expense	7,034		5,623		14,063		11,250
Total operating expenses	148,088		82,951		251,856		150,615
Loss from operations	(61,842)		(16,055)		(85,579)		(20,248)
Interest expense, net	(641)		(167)		(1,500)		(222)
Foreign currency transaction loss	(676)		(308)		(1,457)		(526)
Loss before income tax benefit (provision)	(63,159)		(16,530)		(88,536)		(20,996)
Income tax benefit (provision)	20		63		(232)		(60)
Net loss	$	(63,139)	$	(16,467)	$	(88,768)	$	(21,056)
Net loss per share, basic and diluted	$	(0.53)	$	(0.14)	$	(0.74)	$	(0.18)
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

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

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JAMF HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)

(unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Net loss	$	(63,139)	$	(16,467)	$	(88,768)	$	(21,056)
Other comprehensive loss:
Foreign currency translation adjustments	(21,625)		—		(29,708)		—
Total other comprehensive loss	(21,625)		—		(29,708)		—
Comprehensive loss	$	(84,764)	$	(16,467)	$	(118,476)	$	(21,056)

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

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JAMF HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except share amounts)

(unaudited)


	Stock Class			Additional Paid‑In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Stockholders’ Equity
	Common
	Shares	Amount

Three Months Ended June 30, 2022:

Balance, March 31, 2022	119,659,455	$	119	$	930,788	$	(15,949)	$	(193,037)	$	721,921
Exercise of stock options	59,573	1		345		—		—		346
Vesting of restricted stock units	460,569	—		—		—		—		—
Issuance of common stock under the employee stock purchase plan	130,450	—		3,419		—		—		3,419
Share‑based compensation	—	—		53,024		—		—		53,024
Foreign currency translation adjustments	—	—		—		(21,625)		—		(21,625)
Net loss	—	—		—		—		(63,139)		(63,139)
Balance, June 30, 2022	120,310,047	$	120	$	987,576	$	(37,574)	$	(256,176)	$	693,946

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

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

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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.

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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.

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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.

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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

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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

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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.

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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.

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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.

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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;

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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 $