SEC Filing | Jamf

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jamf-20220930

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 September 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/31a1eb70fa511535535ca81089436c4a-jamf-20220930_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 October 28, 2022, the registrant had 121,387,337 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 — September 30, 2022 and December 31, 2021	4
	Condensed Consolidated Statements of Operations — Three and Nine Months Ended September 30, 2022 and 2021	5
	Condensed Consolidated Statements of Comprehensive Loss — Three and Nine Months Ended September 30, 2022 and 2021	6
	Condensed Consolidated Statements of Stockholders’ Equity — Three and Nine Months Ended September 30, 2022 and 2021	7
	Condensed Consolidated Statements of Cash Flows — Nine Months Ended September 30, 2022 and 2021	9
	Notes to Condensed Consolidated Financial Statements	11
	Note 1. Basis of presentation and description of business	11
	Note 2. Summary of significant accounting policies	12
	Note 3. Financial instruments fair value	15
	Note 4. Acquisitions	16
	Note 5. Goodwill and other intangible assets	19
	Note 6. Leases	21
	Note 7. Commitments and contingencies	21
	Note 8. Debt	22
	Note 9. Share-based compensation	23
	Note 10. Net loss per share	26
	Note 11. Income taxes	26
	Note 12. Related party transactions	26
	Note 13. Subsequent events	27
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	48
Item 4.	Controls and Procedures	48

PART II.	OTHER INFORMATION	50
Item 1.	Legal Proceedings	50
Item 1A.	Risk Factors	50
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	50
Item 3.	Defaults Upon Senior Securities	50
Item 4.	Mine Safety Disclosures	50
Item 5.	Other Information	50
Item 6.	Exhibits	51

Signatures		52

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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 321						ASC Topic 321, Investments - Equity Securities
ASC 606						ASC Topic 606, Revenue from Contracts with Customers
ASC 805						ASC Topic 805, Business Combinations
ASC 850						ASC Topic 850, Related Party Disclosures
ASU						Accounting Standards Update
Capped Calls						Privately negotiated capped call transactions with third-party banks that were entered into in the third quarter of 2021
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
EUR						Euro
Exchange Act						The Securities Exchange Act of 1934, as amended
FASB						Financial Accounting Standards Board
GAAP						U.S. generally accepted accounting principles
GBP						British pound sterling
IPR&D						In-process research and development
JNGF						Jamf Nation Global Foundation
JNUC						Jamf Nation User Conference
LTIP						Long-term incentive plan
Prior Period ARR						ARR from the cohort of all customers as of 12 months prior to period end
RSU						Restricted stock unit
SAFE						Simple agreement for future equity
SEC						Securities and Exchange Commission
SwiftConnect, Inc.						SwiftConnect
UK						United Kingdom
Vista						Vista Equity Partners, LLC and its affiliates
Wandera						Wandera, Inc.
Wandera Merger Agreement						Agreement and Plan of Merger, dated as of May 5, 2021 in connection with the acquisition of Wandera
ZecOps						ZecOps, 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)


	September 30, 2022		December 31, 2021
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	225,480	$	177,150
Trade accounts receivable, net of allowances of $462 and $391 at September 30, 2022 and December 31, 2021, respectively	92,882		79,143
Income taxes receivable	406		608
Deferred contract costs	16,472		12,904
Prepaid expenses	16,186		17,581
Other current assets	6,224		4,212
Total current assets	357,650		291,598
Equipment and leasehold improvements, net	19,116		18,045
Goodwill	800,524		845,734
Other intangible assets, net	215,064		264,593
Deferred contract costs, non-current	36,960		29,842
Other assets	38,128		30,608
Total assets	$	1,467,442	$	1,480,420
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	16,870	$	9,306
Accrued liabilities	57,351		54,022
Income taxes payable	752		167
Deferred revenues	271,721		223,031
Total current liabilities	346,694		286,526
Deferred revenues, non-current	69,509		59,097
Deferred tax liability, net	5,418		8,700
Convertible senior notes, net	363,885		362,031
Other liabilities	22,173		25,640
Total liabilities	807,679		741,994
Commitments and contingencies (Note 7)
Stockholders’ equity:
Preferred stock, $0.001 par value, 50,000,000 shares authorized at September 30, 2022 and December 31, 2021; no shares issued and outstanding at September 30, 2022 and December 31, 2021	—		—
Common stock, $0.001 par value, 500,000,000 shares authorized at September 30, 2022 and December 31, 2021; 121,340,085 and 119,426,064 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively	120		119
Additional paid‑in capital	1,011,205		913,581
Accumulated other comprehensive loss	(64,084)		(7,866)
Accumulated deficit	(287,478)		(167,408)
Total stockholders’ equity	659,763		738,426
Total liabilities and stockholders’ equity	$	1,467,442	$	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 September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Revenue:
Subscription	$	118,524	$	90,700	$	330,132	$	245,900
Services	5,216		4,083		14,187		12,015
License	817		838		4,134		4,671
Total revenue	124,557		95,621		348,453		262,586
Cost of revenue:
Cost of subscription (exclusive of amortization expense shown below)	22,334		18,317		62,870		44,206
Cost of services (exclusive of amortization expense shown below)	3,584		2,955		10,184		8,027
Amortization expense	5,277		5,198		15,760		10,835
Total cost of revenue	31,195		26,470		88,814		63,068
Gross profit	93,362		69,151		259,639		199,518
Operating expenses:
Sales and marketing	54,096		40,856		159,171		103,640
Research and development	30,799		25,608		89,584		58,437
General and administrative	30,061		25,536		103,994		69,288
Amortization expense	7,040		7,025		21,103		18,275
Total operating expenses	121,996		99,025		373,852		249,640
Loss from operations	(28,634)		(29,874)		(114,213)		(50,122)
Interest income (expense), net	45		(1,386)		(1,455)		(1,608)
Loss on extinguishment of debt	—		(449)		—		(449)
Foreign currency transaction loss	(2,624)		(269)		(4,081)		(795)
Loss before income tax (provision) benefit	(31,213)		(31,978)		(119,749)		(52,974)
Income tax (provision) benefit	(89)		1,595		(321)		1,535
Net loss	$	(31,302)	$	(30,383)	$	(120,070)	$	(51,439)
Net loss per share, basic and diluted	$	(0.26)	$	(0.26)	$	(1.00)	$	(0.44)
Weighted‑average shares used to compute net loss per share, basic and diluted	121,014,325		118,640,565		120,188,587		117,983,463

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 September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net loss	$	(31,302)	$	(30,383)	$	(120,070)	$	(51,439)
Other comprehensive loss:
Foreign currency translation adjustments	(26,510)		(8,120)		(56,218)		(8,120)
Total other comprehensive loss	(26,510)		(8,120)		(56,218)		(8,120)
Comprehensive loss	$	(57,812)	$	(38,503)	$	(176,288)	$	(59,559)

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 September 30, 2022:

Balance, June 30, 2022	120,310,047	$	120	$	987,576	$	(37,574)	$	(256,176)	$	693,946
Exercise of stock options	476,637	—		3,139		—		—		3,139
Vesting of restricted stock units	553,401	—		—		—		—		—
Share‑based compensation	—	—		20,490		—		—		20,490
Foreign currency translation adjustments	—	—		—		(26,510)		—		(26,510)
Net loss	—	—		—		—		(31,302)		(31,302)
Balance, September 30, 2022	121,340,085	$	120	$	1,011,205	$	(64,084)	$	(287,478)	$	659,763

Three Months Ended September 30, 2021:

Balance, June 30, 2021	118,249,912	$	118	$	917,116	$	—	$	(113,275)	$	803,959
Exercise of stock options	269,416	1		1,506		—		—		1,507
Vesting of restricted stock units	507,776	—		—		—		—		—
Share‑based compensation	—	—		15,836		—		—		15,836
Purchase of capped calls	—	—		(36,030)		—		—		(36,030)
Foreign currency translation adjustments	—	—		—		(8,120)		—		(8,120)
Net loss	—	—		—		—		(30,383)		(30,383)
Balance, September 30, 2021	119,027,104	$	119	$	898,428	$	(8,120)	$	(143,658)	$	746,769

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

Nine Months Ended September 30, 2022:

Balance, December 31, 2021	119,426,064	$	119	$	913,581	$	(7,866)	$	(167,408)	$	738,426
Exercise of stock options	747,410	1		4,681		—		—		4,682
Vesting of restricted stock units	1,036,161	—		—		—		—		—
Issuance of common stock under the employee stock purchase plan	130,450	—		3,419		—		—		3,419
Share‑based compensation	—	—		89,524		—		—		89,524
Foreign currency translation adjustments	—	—		—		(56,218)		—		(56,218)
Net loss	—	—		—		—		(120,070)		(120,070)
Balance, September 30, 2022	121,340,085	$	120	$	1,011,205	$	(64,084)	$	(287,478)	$	659,763

Nine Months Ended September 30, 2021:

Balance, December 31, 2020	116,992,472	$	117	$	903,116	$	—	$	(92,219)	$	811,014
Exercise of stock options	1,526,856	2		8,568		—		—		8,570
Vesting of restricted stock units	507,776	—		—		—		—		—
Share‑based compensation	—	—		22,774		—		—		22,774
Purchase of capped calls	—	—		(36,030)		—		—		(36,030)
Foreign currency translation adjustments	—	—		—		(8,120)		—		(8,120)
Net loss	—	—		—		—		(51,439)		(51,439)
Balance, September 30, 2021	119,027,104	$	119	$	898,428	$	(8,120)	$	(143,658)	$	746,769

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)


	Nine Months Ended September 30,
	2022		2021
Operating activities
Net loss	$	(120,070)	$	(51,439)
Adjustments to reconcile net loss to cash provided by operating activities:
Depreciation and amortization expense	41,738		33,249
Amortization of deferred contract costs	12,091		9,034
Amortization of debt issuance costs	2,040		573
Non-cash lease expense	4,373		3,705
Provision for credit losses and returns	310		(7)
Loss on extinguishment of debt	—		449
Share‑based compensation	89,524		22,774
Deferred tax benefit	(2,019)		(2,568)
Adjustment to contingent consideration	388		4,837
Other	4,603		1,144
Changes in operating assets and liabilities:
Trade accounts receivable	(15,125)		3,184
Income tax receivable/payable	688		(107)
Prepaid expenses and other assets	(3,351)		(8,129)
Deferred contract costs	(22,919)		(18,052)
Accounts payable	7,766		5,020
Accrued liabilities	2,872		1,644
Deferred revenue	59,922		59,464
Other liabilities	—		52
Net cash provided by operating activities	62,831		64,827
Investing activities
Acquisitions, net of cash acquired	(4,023)		(352,711)
Purchases of equipment and leasehold improvements	(5,645)		(7,261)
Purchase of investments	(3,100)		—
Other	(151)		35
Net cash used in investing activities	(12,919)		(359,937)
Financing activities
Proceeds from convertible senior notes	—		373,750
Proceeds from bank borrowings	—		250,000
Payment of bank borrowings	—		(250,000)
Payment for purchase of capped calls	—		(36,030)
Debt issuance costs	(50)		(12,636)
Cash paid for offering costs	(104)		(543)
Cash paid for contingent consideration	(4,588)		(4,206)
Payment of acquisition-related holdback	(200)		—
Proceeds from the exercise of stock options	4,682		8,570
Net cash (used in) provided by financing activities	(260)		328,905
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(1,322)		(865)
Net increase in cash, cash equivalents, and restricted cash	48,330		32,930
Cash, cash equivalents, and restricted cash, beginning of period	177,150		194,868
Cash, cash equivalents, and restricted cash, end of period	$	225,480	$	227,798

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 (continued)

(in thousands)

(unaudited)


	Nine Months Ended September 30,
	2022		2021
Supplemental disclosures of cash flow information:
Cash paid for:
Interest	$	683	$	944
Income taxes, net of refunds	1,630		1,047
Non-cash activities:
Employee stock purchase plan	3,419		—
Deferred consideration accrued but not paid	—		50,000
Debt issuance costs accrued but not paid	—		489
Offering costs accrued but not paid	17		—
Operating lease assets obtained in exchange for operating lease liabilities	7,320		1,469
Purchases of equipment and leasehold improvements accrued but not paid	311		—

Reconciliation of cash, cash equivalents, and restricted cash within the condensed consolidated balance sheets to the amounts shown in the condensed consolidated statements of cash flows above:
Cash and cash equivalents	$	225,480	$	227,148
Restricted cash included in other current assets	—		650
Total cash, cash equivalents, and restricted cash	$	225,480	$	227,798

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 September 30, 2022, the condensed consolidated statements of operations, of comprehensive loss, and of stockholders’ equity for the three and nine months ended September 30, 2022 and 2021, the condensed consolidated statements of cash flows for the nine months ended September 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 nine months ended September 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 September 30,				Nine Months Ended September 30,
	2022		2021 (1)		2022		2021 (1)
	(in thousands)
The Americas (2)	$	86,687	$	67,330	$	241,816	$	188,594
Europe, the Middle East, India, and Africa	28,622		21,815		82,136		55,745
Asia Pacific	9,248		6,476		24,501		18,247
	$	124,557	$	95,621	$	348,453	$	262,586

(1) Previously reported revenues by geographic region for the three and nine months ended September 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 nine months ended September 30, 2022. The following describes the impact of certain policies.

Trade accounts receivable, net

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.

Activity related to our allowance for credit losses for trade accounts receivable was as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
	(in thousands)
Balance, beginning of period	$	479	$	480	$	391	$	530
Provision	48		37		310		93
Write-offs	(99)		(66)		(281)		(238)
Recoveries of amounts previously written off	34		9		42		75
Balance, end of period	$	462	$	460	$	462	$	460

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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 September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
	(in thousands)
SaaS subscription and support and maintenance	$	112,351	$	83,775	$	312,992	$	222,672
On‑premise subscription	6,173		6,925		17,140		23,228
Subscription revenue	118,524		90,700		330,132		245,900
Professional services	5,216		4,083		14,187		12,015
Perpetual licenses	817		838		4,134		4,671
Non‑subscription revenue	6,033		4,921		18,321		16,686
Total revenue	$	124,557	$	95,621	$	348,453	$	262,586

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 September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
	(in thousands)
Balance, beginning of the period	$	1,840	$	1,596	$	1,792	$	947
Balance, end of the period	1,775		1,726		1,775		1,726
Change	$	(65)	$	130	$	(17)	$	779

For the three and nine months ended September 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 September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
	(in thousands)
Balance, beginning of the period	$	316,952	$	238,457	$	282,128	$	205,509
Acquisitions	—		5,200		—		5,200
Revenue earned	(96,542)		(71,574)		(199,357)		(144,038)
Deferral of revenue	120,820		98,284		258,459		203,696
Balance, end of the period	$	341,230	$	270,367	$	341,230	$	270,367

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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 nine months ended September 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 September 30, 2022, the Company had $407.3 million of remaining performance obligations, with 73% 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 was $4.2 million and $3.1 million for the three months ended September 30, 2022 and 2021, respectively, and $12.1 million and $9.0 million for the nine months ended September 30, 2022 and 2021, 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 nine months ended September 30, 2022 and 2021.

Strategic investments

In the third quarter of 2022, the Company made a $1.0 million investment via a SAFE in ZecOps. The SAFE contains customary terms for an instrument of its type, including repayment or conversion upon certain future liquidity events. The investment, which does not have a readily determinable fair value, is measured using the measurement alternative in accordance with ASC 321 and included in other assets on the condensed consolidated balance sheet. As of September 30, 2022, the balance of the investment was $1.0 million. In the third quarter of 2022, the Company also executed a $2.0 million convertible promissory note with SwiftConnect. The note contains customary terms for an instrument of its type, including repayment or conversion upon certain future liquidity events. The note matures on July 29, 2024, and the Company intends to hold the note until maturity, unless it is otherwise repaid or converted pursuant to its terms. The investment is recorded at cost and included in other assets on the condensed consolidated balance sheet. As of September 30, 2022, the balance of the investment was $2.0 million. The Company evaluates its strategic investments quarterly for impairment. During the period ended September 30, 2022, there were no changes in the carrying value of the Company’s strategic investments. All gains and losses on the Company’s strategic investments, whether realized or unrealized, are recognized in the condensed consolidated statements of operations.

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

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JAMF HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

Company’s condensed consolidated financial statements. We are applying the new guidance to acquisitions completed in 2022 and thereafter.

Note 3. Financial instruments fair value

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.

The fair value of these financial instruments were as follows:


	September 30, 2022
	Level 1		Level 2		Level 3		Total
	(in thousands)
Assets
Cash equivalents:
Money market funds	$	193,848	$	—	$	—	$	193,848
Total cash equivalents	$	193,848	$	—	$	—	$	193,848

Liabilities
Contingent consideration:
Accrued liabilities	$	—	$	—	$	5,900	$	5,900
Total contingent consideration	$	—	$	—	$	5,900	$	5,900


	December 31, 2021
	Level 1		Level 2		Level 3		Total
	(in thousands)
Assets
Cash equivalents:
Money market funds	$	146,037	$	—	$	—	$	146,037
Total cash equivalents	$	146,037	$	—	$	—	$	146,037

Liabilities
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.

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JAMF HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

The following table provides a summary of the changes in contingent consideration, which is classified as Level 3:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
	(in thousands)
Balance, beginning of period	$	5,700	$	8,300	$	10,100	$	8,200
Additions