Q2 2020 Jamf Holding Corp Earnings Call

September 1, 2020

[music].

Ladies and gentlemen, thank you for standing by and welcome to the chance second quarter 2020 earnings Conference call.

At this time, all participants' lines are in listen only mode.

After the speakers presentation, there will be a question answer session.

Last question during the session you legal press star one on your telephone.

Please be advised on today's conference is being recorded.

If you require any further assistance please press star zero.

Now I'd like to hand, the conference over to your speaker today. The slowness there. Thank you. Please go ahead Matt.

Good afternoon. Thank you for joining us on today's conference call to discuss chance second quarter 2020 financial results with me on today's call again, Hager chance Chief Executive Officer, NGL, putting in the company's Chief Financial Officer.

Before we again I would like to remind you that shortly after the market close today, Jim issued a press release announcing its second quarter 2020 financial result.

Additionally, Jeff published in Investor presentation, you May access a press release and the presentation on the Investor Relations section of Jam Dot Com.

Today's discussion May include forward looking statement. Please refer to our IPO prospectus dated July 21st 2020, and our quarterly report for the quarter ended June Thirtyth 2020 filed on form 10-Q and filed with the Securities and Exchange Commission, where are you will see a discussion of factors that could cause the companys al.

Actual results to differ materially from these statements.

I'd also like to remind you that during the call. We will discuss some non-GAAP measures related to Jim's performance you can find a reconciliation of those measures to the nearest comparable GAAP measures and our quarterly financial statements to ensure we can address as many analysts questions as possible during the call. We'll ask that you. Please limit your questions to one initial class.

Justin and one follow up now I'd like to turn the call over to being Hager theme.

The Carolina and thank you everyone for joining us on our first earnings call.

Let me first say that it's great to talk to all of you again as a public company.

Jim Sorry appeal was a significant step in our journey to help organizations succeed with Apple and it's a culmination of a lot of hard work by many people on behalf of our entire management team I want to think or Jim team members damn jump nation for their continued support in achieving this milestone.

We're very proud of how far we've come since jump was founded in 2002, and we look forward to building on our success in the years ahead.

We like many of you are now in our six month of working remotely and I am so grateful to our team and the outstanding work that they've done executing well being physically isolated from people they care about amid an uncertain macroeconomic environment caused by cobot 19.

In addition in light of the tragic events that occurred in our home, calling in Minneapolis and the more recent events in our founding state of Wisconsin. I also want to think the gym team for their commitment to be part of the solution as we listen learn and take action against racial bias in justice and in equity.

Like the rest of the world, we have significant room for improvement and we commit to getting better as we continue to serve our local and global communities.

For our call today, I will recap the highlights of our second quarter and provide a background on Jan for those who are newer to the company.

Finally, I'll touch on some of the exciting developments and customer wins, we had in the quarter before turning it over to jail, who will walk through the financials in detail. Since this is our first call together and we have many listeners who are just getting to know Jim I plan to spend a bit more time upfront and I will on future calls.

We had a very strong performance in Q2 and achieved record quarterly revenue, while significantly improving operating margins total revenue in the second quarter grew 29% year over year to a record $62.2 million driven by recurring revenue growth of 42% year over year two.

$58.8 million, which is now over 94% of total revenues.

Annual recurring revenue or a are as of June thirtyth was $241 million growing 36% year over year.

Non-GAAP operating income was $11.2 million in the quarter or 18% of revenue. This is a nine point improvement over second quarter of 2019.

And Unlevered free cash flow totaled $21 million than the second quarter, representing an unlevered free cash flow margin of 34% compared to 4% in Q2 of last year.

Our strong growth is driven by the essential role we play as the standard an Apple Enterprise management.

I think communicating the value of what we do a jan can be done by telling a short story about my first day of work a gem, which was over five years ago and I apologize for those of you who have heard this story already I tell up because I believe it's a quick and effective way of conveying the power and value of the jammed platform.

On my first add Jim I was prepared to sit down with our IP Department to configure my computer to the exact security requirements that I needed.

For me passwords and provisioning a host of applications.

That was exactly the experience I had it all my previous employers instead I phone a map book with a post that note stuck to the outside of a steel box. It said step one open box step to power on step three there is no step three no. One was needed to help me set up my computer yet it was cut.

Connected secured and loaded without needing specifically for me when I turned it on I still have that posted note and it has become our mantra to demonstrate the simplicity Jim brings to the end user I T and the enterprise.

Jim embraces Apple technology because of its legendary simplicity for the individual as Apple focuses on the person Jim focuses on the people. Our goal is to empower people with Apple technology into make every enterprise experience as simple and seamless as apples consumer experience whether the.

Devices are being used in an office hospital retail store or school.

We filled the gap between what Apple build for the person and what the enterprise requires.

James platform helps transformed the relationship between I T and the people they serve empowering I T to empower their customers efficiently.

Jeff addresses the needs of organizations of all shapes sizes scale geography, an industry our platform centers around three pillars connecting users protecting devices and managing Apple workflows that are critical for individual and organization productivity.

Specifically or Jim connect product provides access and account management features integrating with our customers cloud identity provider to seamlessly and securely connect users to the resources they need to be most productive in their role.

Our purpose built endpoint protection product jump protect provides insight regarding how the apple devices behaving the processes that are running and actively identifies and blocks known mall, where and behaviors that should be flag as a potential issue or risk for the device user or enterprise.

To manage the Apple ecosystem of devices applications and cloud services, we offer three purpose built products, Jim Pro Jim School in jump now.

These solutions are designed for specific market segments able to address the most complex Apple deployments in the world deliver instant on demand simplicity for small businesses and the arm teachers with the tools they need to focus students and optimize technology used in and out of the classroom.

And with nearly a decade of same day support for apples operating system releases James individual products together offer an integrated platform for full lifecycle Apple Enterprise management.

In addition to the value of the jump platform or user community jump nation has over 100000 members and is one of the tightest online communities and all of high Tech.

They are committed to helping one another solve problems in share best practices and this rich user generated content gets picked up by search engines and helps more people get introduced to jump when they searched for anything regarding apple in the enterprise.

Our annual jump nation user conference or Jane will be virtual this year and is being held September 29 to October Onest, we're anticipating our largest turnout ever with thousands of attendees from around the world. We invite all of you to join and watch our keynote presentation on September 29.

Also presentations from many of our customers partners and jam team throughout the remainder of the event.

As in the past attendees can also expects sessions and commentary directly from Apple.

[noise] Jeff's dedication to innovation and customer success has fueled our growth to where we now serve over 40000 active customers of all sizes in industries in over 100 countries.

Amongst this broad base of customers. We also support some of the largest companies in the world. We serve all of the top 10 largest U.S. banks 24 of the 25, most valuable brands 15 of the top 20, U.S. hospitals and seven of the 10 largest school districts.

We are broadly distributed with no end customer comprising over 1% of annual revenue and we believe that diversification helps stabilize our business overtime.

Jeff has had a long history of helping organizations through strategic transformations never has our support been more important in the past several months.

Chance capabilities have put us in the unique position to help our customers with their digital transformation in response to covert 19.

Well, we have seen the same market an organization challenges as everyone else. It has been rewarding to also provide solutions that are uniquely valuable in this difficult market.

For years Jam has been building a framework for completely touchless deployment and support.

Now suddenly it's required for everyone.

We've been able to hospitals to deliver care, while preserving PPD and keeping their care provider safe and weve help patients CNET, but their families while in isolation using our patent pending virtual visits workflow.

We've also virtually connected classrooms, empowering teachers to focus their students and control the content on Apple devices, even though they are miles away and we've helped businesses stay in business by empowering I T to empower employees at home.

Technology is no longer part of the employee experience. It is the entire employee experience what was once nice to have is now a necessity.

Even after we work through this difficult period, we do not believe the world will go back to the way things, where these past several months have laid the groundwork for future where people can work from anywhere learn anywhere and receive care anywhere.

To be clear Jampacked seeking the same macroeconomic market challenges as other organizations, we have seen customers reduced their staff and therefore lower their device contract renewal some customers have requested to delay payments and we've seen many budget cuts and deferrals, yet janse ability to help organizations across.

Most of the World implement worked at home Tele health and distance learning workflows has in large part offset many of the macroeconomic challenges. Let me give you a few examples.

First in health care and industry that is on the top of everyone's mind.

One of the hospitals, we serve as Oxford Health NHS Foundation Trust.

We have worked with Oxford health since 2018, when we were brought in to help streamline their clinical communications efforts with more than 4000 ipads.

In Q2 of this year, the cobot 19 outbreak accelerated their digital strategy, Oxford health added jams virtual visit solution to seamlessly configure and deploy Microsoft teams to ipads without requiring complex steps for users to get set up or connect virtually.

Oxford Health now simply connects patients in isolation with their loved ones without I T having to touched the device or provide assistance.

You see San Diego Health is another example of digital care acceleration for several years, Jeff has helped power you see estes patient bedside in clinical communication initiatives using I pads, an iPhone in Q2, you CSD started using janssen virtual visit solutions to empower care providers to sell.

Simply inefficiently visit patients throughout the hospital using zoo to over 700 bed side, I pads, providing critical patient care, while keeping care providers safe and conserving PPD.

In the education industry Cobot 19 resulted in students around the world to be sent home.

Some schools, who are more digitally advance wearable to continue classes.

Others were not.

But in Q2, all schools, new they needed to prepare learning strategies for the upcoming school year that would effectively support both educators and students whether school was remote in person hybrid or a combination overtime.

Fortunately governments around the world have created programs to help fund. These initiatives for example in Japan, we saw several new schools come to Jim using funding from the Giga program, which is in abbreviation for global and innovation Gateway for all our program intended to provide high capacity communication that.

For schools in Pcs or tablets to all elementary and secondary students in Japan by 2023.

In Q2, we also saw an acceleration of similar activity in Germany as a result of the did Japan project.

And here in the U.S. the cares App is providing schools with an avenue to fund the digital initiatives required for distance learning.

One example is Austin Independent School District in Texas, where they purchased 24000 seats of jam to help prepare for the upcoming school year.

To safely distribute and personalized these devices for student Austin created a work flow using chat to automatically configure devices by simply scanning a QR code for the next student in line.

The result was a safe distribution of all students devices with an average five minute turnaround time from one parent arrived in the parking lot to the party with a brand new Apple device, enabling personalized distance learning for each student.

Here in Minnesota, when students were sent home in the spring Saint Paul Public schools was able to rapidly adapt to distance learning requirement in part because of their partnership with Apple and Jan and.

In preparation for the upcoming year Saint Paul was able to purchase additional devices now with 45000, ipads and 14000, Matt.

For students that don't have home kind of activity Saint Paul purchase T mobile hotspot and using Champ configured the student devices to automatically use the appropriate hotspot, while blocking anyone else from easier.

They also use jam to configure Google meat for any person virtual classes and provide a St. Paul's public schools specific app store with over 500 educational apps available to students.

In addition to helping hospitals and schools in Q2 Jam also help businesses stay in business in the UK stalling bank credits Jan for enabling them to pivot entirely to remote work.

When forced to send employs home stalling bank was able to immediately spend 250 brand new map books out to employs homes in one day with another 150 map books in the days that all of.

This was achieved using zero touched deployment that was completely personalized with Jan and secure multifactor authentication for accessing enterprise resources enabled by Jim connect.

Not only were employs provided this technology in their homes. The I.T. team was able to orchestrate the deployment entirely from their own homes and provide outstanding service with no need to go into the office.

Scribe and E signature business out of the Nordics and jam customers since 2018 expanded their jump usage purchasing our latest product jammed protect to ensure their map fleet was secure and save as employees accessed company resources remotely.

Scribe needed a Mac specific security solution with malware prevention and a design that eliminated colonel extensions and provided seamless integration with jump pro to offer immediate remediation of identified issues.

And we're very proud to have taken remote empowerment to a different stratosphere by once again entering space in Q2.

Many of you saw Spacex make history by launching NASA astronauts to the international space station and then returning them to Earth safely using Apple I pads for the crew and ground support staff Jan is proud to be space at CES partner for managing thousands of Apple devices.

These customer examples are representative of an addressable market for Apple Enterprise management.

The global total addressable market or Tam for Apple Enterprise management is estimated to be $10.3 billion and 2019 and is expected to grow at a compound annual growth rate, a 17.8% to $23.4 billion by the end of 2024, According to Frost inside.

The market has been growing consistently over the last decade for a few reasons one because of the consumerization of ITC, which refers to the migration of software and hardware products. Originally designed for personal use into the enterprise today employees are less inclined to draw a line between work.

In personal technology, and commonly prefer not to settle for enterprise solutions that are harder to use and what they have in their homes.

This is a trend that has seen even more traction due to the digital transformation happening in response to covert 90.

To Apple continues to innovate new technology that increases its penetration within the enterprise, including iPhone iPad, Apple TV and Mac, specifically, we see enterprise market share for Mac, continuing to expand which we believe is still in the early stages, Jeff will help facilitate that expand.

And benefit from it.

Jeff has been pursuing our mission to help organizations succeed with Apple for over 18 years, yet. We believe we are still early in our story and our market opportunity Jampel continue to extend our technology leadership position through R&D investment and new products that deliver unique industry specific innovation.

We will invest and targeted sales and marketing to grow our customer base and increased sales to existing customers. We also have an opportunity to grow by further expanding our global presence and finally, we will continue to cultivate Jeff nation and relationships with developer partners to further build out the jump.

Marketplace in order to provide customers and ecosystem of solutions that help them succeed.

In summary, we are pleased with our Q2 results in a very difficult environment. We continue to see strong demand across the business. We are in the early innings of a significant market opportunity.

We appreciate your interest in the Jam story I'd like to now turn the call over to Jill to walk through our financial results and guidance Jill.

Thanks, and thanks again to everyone for joining us today.

I'll start by providing a brief overview of our financial model and then I'll go through our second quarter results in detail before moving on to guidance for the third quarter and full year 2020.

Our software platform adopted primarily say subscription SaaS model.

This is description I typically in one year into rates and anyway in advance.

The after tiered pricing based on a number of devices installations are deployed on across the organization.

We see multiple levers that drive our land and expand model, including new logo acquisition.

Increasing number of users across the organization.

Adding organize it to the platform.

Expanding our product suite with the introduction of value added products.

We have primarily a recurring revenue model, what's recurring revenue expanding as a percentage of our total revenue.

The small question about revenue nonrecurring and this includes on premise perpetual license revenue as well as services revenue.

The primary goal other services offering it to ensure our customers are successful what that camp deployments.

It's unclear configurations support and training services, which are priced any 60 basis.

Well service revenue will fluctuate quarter to quarter expect services today smaller portion of our revenue overtime.

We expect perpetual license revenue to decline in absolute data as more customers deploy our stock record that model.

As Dan mentioned, we had a very strong second quarter.

Total revenues for the second quarter was $62.2 million growing 29% you know over here.

Recurring revenue totaled $58.7 million and the second quarter, an increase of 42% year over year and comprise 94% of our total revenue, there's an 85% in second quarter last year.

Nonrecurring revenue was $3.5 million.

We had a strong finish this june and develop new account and renewals.

Moving on to pay our Uh huh.

As a reminder, they are our represent annualized value of all subscription support and maintenance costs at the end of the period.

They are little bit fluctuations isn't Audi contract terms and the sales mix a subscription so time based licenses and staff.

Total air are as of June Thirtyth, 2020 were 241 million dollar <unk>.

<unk> increased to 36% year over year.

Three primary drivers independent growth of our and our IR.

First being a consistently high device extension nights.

Second Istanbul level acquisition.

And third the Upselling and cross selling opportunities for product once our installed base.

We expect to continue benefiting from these trends in years ahead.

There's a limit our ability to grow the number of devices on our soccer platform provides a key indicator of because of our business and our future business that the Kennedy.

The define it device at the end of any particular period, that's having at least one active subscription support and maintenance agreement as of the measurement date or that hasn't even low probability of renewal.

It's a little customer has multiple chance products I think I'll divide, but we still that only count that as one tonight.

As of the end of Q2 that 17.2 million devices on our platform, representing 19% year over year growth rate.

The stuff particular strength in healthcare and education vertical this quarter. It's cobot 19 has accelerated the demand for organization to connect remotely manage and protect the Apple devices.

We have a history of attracting new customers and growing our annual spend that that overtime.

Driving our high dollar base net retention me.

We accomplished this the adding devices to clat farm, expanding our customer adoption of add on products.

Our Dallas its net retention rate was 117% for the trailing 12 month ended June 30 2020.

Before turning to expense items and profitability I would like to point out that I'll be discussing non-GAAP results for the remainder of my remarks.

Our GAAP finance only belt, along with the reconciliation between GAAP and non gap I found in our earnings release.

Gross profit was $61.3 million up 37% year over here well gross margin at 82% up five point year over year.

The second quarter gross margin was better than our recent historical rate, it's a mix shift in revenue and cost of sales as we delivered left a lot lower margins because they are difficult districts.

We expect gross margin to increase overtime as compared to their right to deliver prior to the impact of co that.

As recurring revenue becomes a larger questionnaire total revenue and that's the increased average A.R.R. per device.

Turning now to operating expenses.

We remain focused on improving the leverage in our business, while balancing investments for growth.

But this thing and listen mine.

That's our recurring subscription revenue to grow at a faster rate than our operating expenses.

Okay can you tell improved operating margins over time.

Total operating expense for Q2 was $40.1 million compared to $33 million kit to last year.

This year over year growth was driven primarily by continued investment in our global go to market strategy as all investment in research and development as innovation in both our existing and new products and features remains a top priority for us.

Linda just said capability anticipation of operating at a public company.

The delayed so plans thing in CTG to coordinate team and that's the portion of that expense saving the second half of this year, what the majority of the investment spending in the fourth quarter.

Our operating income in the quarter with $11.2 million and $4.4 million in Q2 last year.

Non-GAAP operating margin was 18% representing a nine point increase compared to the same period last year.

Partially due to the delayed spending in the quarter.

Our basic and diluted average share count for the quarter was 102.9 million compared to $102.7 million in the second quarter as 2018.

Please note this second quarter share count is not pro forma so the July IPO newly issued shares.

Unlevered free cash flow $21 million in Q2 compared to $1.8 million last year.

Second quarter Unlevered cash flow represents 34% of total revenue up to 4% of total revenue a year ago.

Our operating model hydro, an improving efficiency, yeah strong cash flow generation.

In addition in second quarter, our cash flow benefited from our actual to preserve our cash balance which included a reduction in spending as they evaluated the impact of Kovac 19, and our business.

We expect that these investments will return the second part of this year.

Turning to the balance sheet. We ended the second quarter was $38.4 million in cash cash equivalents and short term investments.

Following the close of our IPO on July 24, we added approximately $319 million in cash.

On July 27, we paid down the principal amount of our term loan facility and related and just any penalties of approximately $210 million.

And finally, turning now to guidance as being discussed a business if things come benefits from a number of trends emerging during these challenging time.

Including the proliferation of Tele health remote learning and the rise a little more permanent work from home movement.

At the same time, there is embedded uncertainty around I keep spending environment as we know.

Little spending and new I T project I said, just two more scrutiny across organization everywhere.

But these dynamics in mind for the third quarter of 2020, we expect total revenue in the range of 65 million to $66 million representing growth of 19% to 21% year over year.

Non-GAAP operating income in the range of $597 million.

Any nonrecurring charge of $5.2 million related to the early extinguishment of our term loan facility.

For the full year 2020 weeks that total revenue in the range at 255 million to $257 million.

Representing growth of 25% to 26% year over year.

Non-GAAP operating income in the range of 20 million to $23 million, reflecting a partially nonrecurring increase in operating expenses as they plan to spend a portion of the in expenses. The late in Q2 and the second half of the air.

For modeling purposes, we're providing the following information.

We expect an annual effective tax rate of 25%.

As a reminder, we use our statutory tax rate when calculating tax effects of non-GAAP adjustments, but there's not materially different from our annual effective tax rate.

The calculating GAAP EPS.

That basic weighted average shares outstanding to be approximately 113 million to the third quarter 116 million for the fourth quarter.

109, nine fiscal year 2020.

We're not providing a diluted weighted average outstanding share count at this time as it would not have a material impact on you can't.

In closing.

We're very pleased with our performance the second quarter and look forward to sharing that results in the quarters ahead.

With that didn't and I will take a questions operator.

As a reminder to ask a question you will need a press star one on your telephone to.

To withdraw your question press the pound key.

And the interest of time, you, especially pleased on yourself to one question.

Please standby, while we compile the culinary roster.

Our first question comes from Rod Hall with Goldman Sachs. Your line is open.

Yeah. Thanks for the question and congrats on your for set of earnings as a public company. So I wanted to start off maybe and now DNA agility guys what to commit on the trajectory of demand. So we've clearly seen at a flurry of activity as everybody go into work from.

Home and study from home here and I Wonder how you see the pipeline of opportunities extending on out. The next couple of quarters. As you know just kind of help us with the ebb and flow of demand that at that process unfold. There continues to unfold and then the other thing I thought since it's the first time you guys have reported earnings due in May.

Maybe I could get you to talk a little bit about.

What your relationship with Apple is I know that they recently bought that somebody fleet summit, which have xyratex provisioning, but just how do you see their intentions in enterprise management moving forward Bert the five year old maybe you could give a little history on how that's going to thing.

Sure Hey, good to hear from your Rod there was a lot there honored I just speak first about the trajectory of demand.

A great data points to look at that would simply be our pipeline and when we take a look at our pipeline and our coverage that we have it is actually very similar post the covert breakout as it was our prior to it if there's any difference in behavior. Our post covert breakout is that we do see.

The some deals in the pipeline are pushing or taking longer to close but to counter that we also see very fast moving deals coming into the pipe. We're a school needs to very rapidly get distance learning in place or a of work place like those that I mentioned in my prepared comments.

Our needs to very quickly arm employees at home, so amazingly, they've actually kinda offset each other and our overall pipeline coverage remains about the same as it was a prior to the call they don't break.

In relation to Apple are we obviously over the last 18 years, we've had a long our relationship with them are we have certain contractual elements with Apple and that Apple is a reseller of ours through their retail stores going through their education channel I. In addition, our Apple as a customer of ours in house Ben.

Since 2010.

Generally speaking Apple create an April month services that Jan for example to leverage in order to build solutions. So for instance.

And our view the MDM framework is exactly that it's a framework on what you build solutions. It's not the end solution for the customer so Apple will tend to build services and frameworks and focus their energies on building for the individual user and then jam for use the great Tech.

Analogy that Apple build and build upon it for a more robust Apple enterprise management system that then can be fully deployed whether it be in schools hospitals, where the workplace.

And then finally regarding the fleet Smith acquisition itself are both pre and post acquisition there from Apple, they're such little of functional overlapping market overlap that weve never really consider that a competitive thing. We think apples intent is to continue to build out on the great Apple business manager system that they.

Yeah, and then more they do the stronger we can create our solutions and it'll be just be good for our customers.

Great. Okay think baked in appreciate it and truck.

Thank you. Our next question comes from Sterling Auty with JP Morgan. Your line is now open.

Yeah. Thanks, Hi, guys I guess for my question I wanted to dive into the education sector in particular.

Can you give us a sense of what is the typical buying season in the education vertical do you think you've seen all of the tailwind from Covidien in your June results or does the carry into September and how much of that gets split between you know.

Higher education colleges versus K through 12.

Hey, Thanks Sterling on it it's a very interesting season for education right now.

The U.S. the fiscal year run from July through June. So you end up having awesome seasonality in the month of June our spending last year's budgets, but then you also get some seasonality in July because of spending of this year. Its budget that typically goes throughout the summer in preparation for.

The school year here in the U.S. granted some school years run different time friends around the world and Jim served education customers around the world for you need to be mindful of that as well.

The bulk of the business.

In K 12 of our education business about 85% and I would say this year because of co bid that the buying season for education is Ethan extending closer to the school year, and we would it be never even expected to enter into the school year, a little bit and that is for.

For a few reasons one is the need to serve those students and two is just the processes for getting budgeting for it I mentioned three different governments and sources of budgeting.

Mature our budgeting in my comments and so sometimes that just takes a little bit of time and so schools are going through that process to get budgeting in place in order to do their purchases to be ready for the school year. So it's a little bit heightened this year compared to most years I believe.

Got it thank you.

Absolutely.

[laughter].

Thank you. Our next question comes from Brad Sills with Bank of America Securities. Your line is now open.

Great. Thanks, guys I wanted to ask about where you're seeing some of the.

Staff reductions in device reductions is that limited to hard hit industries or just any color on where you're seeing that exactly please.

Sure thing Brad Yeah, I mean, obviously and some of the industries that you know like hospitality, they're going to be the hardest hit and call that one of the things that is.

To jams advantages when you look at our lead industries of education healthcare information services at banking on some of those industries, our lesser hit them some of the others and as a result, we've been isolated a bit and in fact in some of those industries.

Actually seen increased.

Activity because of the need to respond to covert in a way that keeps care providers save a lot of teachers to still control their classroom and empowers workers at home.

Great. Thanks, and you made some comments earlier than on a stronger June.

Should we take that to mean that you know the in the environment is kind of improve throughout the quarter in any July in any update for July and August I think would be really helpful. As well please.

Sure and just to recap a little bit of what we saw in Q2, you know there was definitely a slow down when we took a look at April and I think almost everybody experience that.

As people were just assessing to see what was going to happen. We then saw improvements in May and then from a volume perspective June felt pretty normal to US you know rhythms might've been a little bit different in terms of fast insulin we've been deals but from a subscription volumes. It started to feel pretty normal trust and that has continued as.

We've entered into the summer as well the only thing that has stayed as.

As a bit of a challenge would be some of those face to face professional services are that is still slower than what we typically see.

Thanks, so much teens.

Sure.

Thank you. Our next question comes from Raimo Lenschow with Barclays. Your line is no.

Hey, Thanks Am I have one question on one follow up if that's okay.

First one if you for them and congrats on the first quarter actually they let me start would that.

The if you look at the the changes that we're seeing now in terms of industry coming from coal, which typically like headwinds and tailwinds that you're right. So seeing but how do you think this will impact the whole industry and in terms of how that will play out for your business over the coming quarters, because that this and obviously that emergencies.

And then the school, having all these immersive stuff, but can you talk a little bit about the the underlying changes you're expecting.

40 industry.

That's one and then one the follow up is more like a number crunching one like if I think about device colston, 19% and is that kind of a new normally it was slightly lower than in other quarters can you just kind of comment about some of the puts and takes to thank you.

Sure. Thanks, Raimo why don't I take the first side of that on the headwinds and Tailwinds from NGL can comment on the device growth.

First of all of headwinds I'll start on the negative we've clearly seen some budget to push out we see some staff reductions I know there as a result from device reductions that renewal and we have also seen some customers of requesting to pay I have deferred payment up but off.

Setting those macroeconomic headwinds we are seeing the overall trends of industries.

As Tailwinds and I've already covered down work from home Tele health and distance learning and those are only distance learning really has an additional source of funding from the government programs. You know the other organizations are coming up with the budgeting that they need in order to do what they must stay in business.

Care for their patients make sure that their students are still in a quality class.

We believe that you know you can't put the Genie back in the bottle when it comes to those trends everything that we see surveys we've conducted analysts that we've talked to say that the work from home at this is actually in igniting event that is going to cause more employees to work from home in the future and if you think.

That most of our momentum in the industry has been the result of the Consumerization of I'd. When you have the group the greatest movement of people from the office to their homes in the history of the World I believe that that will fuel, but consumerization of IP and I think that schools will now start to embrace distance.

Learning for thing you know in Minnesota, we have things called snow days in the future.

No not half nowadays anymore, because we are distance learning enabled and we see hospitals.

Actually seeing these virtual visits rounds around the hospitals being quite productive efficient and even providing better patient care. So we think those trends are gonna stay even after the macro economic challenges go away and with that went on I hand, it over to Joe We're talking about device go Hey, right now yeah. So far.

Device growth forgot looking out a couple of things impacting the most recent quarter a lot of again are talking about what the impact of co vet and particularly in the commercial sector, where we saw our customer thing a little bit more deliberate about the number of devices, they're purchasing and renewing really not carrying anything extra then they needed I'm also not renewing early our buying early so they live.

They have an impact there then the other thing driving it is that we're right in the middle of our summer on our education busy season that that's even straddled Q2 in Q3 and those devices and education. Our device expansion is slower than in the commercial sector and so that mix it out a little bit different in the second quarter by the time, we get to fourth quarter will be.

Back to flipping it around where I work more heavily focused on our commercial business and we'll start to see that front again.

Okay. Thank you congrats.

Thank you. Our next question comes from Matt Hedberg with RBC capital markets. Your line is no.

Great. Thanks for taking my question and congrats guys on on the IPO, you know Jill or Dean you cross selling and Upselling and your base is one of the core drivers of sustained air our growth now I know, both connect and protect our relatively newer products, but they can roughly double the average revenue per per.

Per user can you talk a bit more about what you're seeing today in terms of demand for those to add on modules and perhaps how they might ramp in coming quarters in years, especially.

Considering security on Apple devices, historically has been one of the bigger reasons for not deploying Apple in the enterprise. Thanks guys.

Yeah sure thing Thanks, Matt we're very pleased with the demand very plays at the demand or Jim connect has been on the market now less than two years chant protect has been on the market for less than one year, our customer account for jam protect as measured in hundreds.

Jeff connect is over a thousand we believe that that's been very good adoption in a very short time in markets and as time goes on and we continue to integrate our solutions together into offering more of a complete platform than a set of products.

We see that demand even growing further.

You know Apple products are known afford the strength insecurity, however, not many enterprise security providers focus on Apple the weighted Champ does and as a result, we believe that not only well the popularity of our security products grow.

But we think will actually pave the way for Mac adoption in the enterprise to grow as well.

Thank you. Our next question comes from Gregg Moskowitz with Mizuho. Your line is now open.

Okay. Thank you very much good afternoon, guys I'll add my congratulations as well I guess from my first question. So Apple had a strong quarter as well, including map revenue growth of 22% and just to be clear Dean. Since this question does sometimes come up can you talk about the correlation or lack thereof between apples unit shipments in your area.

Gross.

Yeah actually thanks for that question, Greg it's important to understand that obviously every time Apple grows in their unit shipments you know, Jim certainly doesn't consider that a bad thing.

However, our business predominantly grows through the enterprise and education acceptance of using Apple products at school or at work and that acceptance within the enterprise is actually out pacing, even the device growth that you see I mentioned, our Tam of being 10 point.

$3 billion in 2019 and growing at over 17% in the coming five years, According to Frost and Solomon that growth rate of the town has to do with the enterprise embracing the Apple products more than it has to do with just unit shipment from Applebee's quite frankly, the Apple ecosystem is already.

The very large out there and we have a lot of work to do Inserm in terms of just continuing to enable those apple devices within enterprise usage.

Okay perfect. Thanks, Dean and then you mentioned that K through 12 is about 85% of your education business I was curious into higher Ed side, because you know with an increasing number of college campuses moving to an entirely online curriculum or at the very least one that is primarily online has this sparked more conversation.

In a potentially even commitments from these colleges supervision their student body with Max that they can control you know instead of utilizing a b Y O type of a approach.

I think that were very early on that discussion and high add right now in fact overall within education as much activity is there as they get.

Ready for distance learning I still think that there is a lot of movement to be had remembering were a global company and I mentioned, the Japan Giggle project for instance, their plan was to put products.

In the hands of every student in Japan by the year 2023, So there's still quite a long runway there even for our primary and secondary and within high add right now because they generally don't provide those devices for their students on a mass scale, we see a lot of comps.

Stations on exactly what you were talking about should they sold that you can have the same professor to student relationship that you have within the K 12. So we've noticed in the last few years that more high adds to our universities have been providing those devices to students.

And we actually expect that to grow in the future and I think were actually pretty early on in it and high add right now.

Okay very helpful. Thank you.

Thank you.

Our next question comes from David Hynes with Canaccord. Your line is now open.

Hey, Thanks, very much congrats guys on the on the deal in the results.

I want to ask with Apple moving to its own silicon for the Mac curious if you see that having any impact on your business you know the good or bad.

Oh sure and for those that are listening or Apple recently announced that they would be moving there Matt processors from Intel to Silicon Oh, We think it's awesome Oh, we think it's going to create a more powerful Mac computer that will be selected by more people within the workplace.

Especially as more people from within the workplace go home.

And you do have that blurred line between what is.

Your personal computing and what is your work computing and certainly would not put up with having a personal computer that is able to do more and be more powerful than your work computers. So we think that apple silicom or make other Mac, even a better product and of course when organizations move on to those Matt.

You know it isn't an overnight movement there are going to have a period of time or they're going to have a apple Intel Max within their fleet and silicone maps within their fleet and we can help them through that transition because nobody has inventory on the Mac as Jeff does and we'll be able to make sure that the right policies get applied to the right machines.

After all we are really the only ones in the market that we're here to help through the Powerpc the Intel journey that Apple went through a few years ago and were able to use some of those same techniques and our our best in class Apple Enterprise management technology to be able to help organization through that so we see it as a net positive <unk>.

And one follow up Matt asked about kind of cross sell up so activity and attraction there as you continue to roll out.

No new AD on modules, how high is up for per device fees, but before you might start to see some pause from buyers in other words.

Is there a notional ceiling on on what they are willing to pay per device I mean, obviously higher from here, but you know where do you think that might be.

I'm not going to spit out what you know the number is in terms of what the maximum I think that people would pay per device be thats.

It gets a little bit funny, but I will tell you there that more and more if you just look at the total cost of ownership of the Mac within the workplace and for that matter I from an I pad as well and you start totaling up the cost of all of the software they end up putting on it the residual value of the machine.

Quality of it.

There've been several studies that you've seen and including recently a Forrester total economic impact study that shows that the total cost ownership for the Mac is lower so I believe that theres still more value to provide and provided that we keep our customers total cost of ownership lower than other alternative.

They'll continue to our purchase value add products.

That's very helpful. Okay. Thanks, guys congrats.

Thank you. Our next question comes from Pat Walravens split.

M.P. Securities. Your line is now open.

Oh, great. Thank you, let me add my congratulations well gel one sort of housekeeping for you and that being a bigger picture one Joel just.

To help investors out there who aren't necessarily 100% beat on the story. Your EPS came in a little below the consensus, but then I can do you look at your guidance.

Everything else businesses, clearly strong was there something that was a bit of a disconnect. There we should call.

Yeah, Hey, Pat good to hear commit and thanks for the questions I really didn't want to try to address the here in front end up so it really comes down to our effective tax rate that was applied and you know really going forward and I encourage everybody to model using our annual effective tax rate, which is 25% ethics and then models are picking up a flat tax rate that got applied so you push that through.

With our beat on all the other metrics kind of gotten a few things that say down there, but it really comes down to that and then just as a reminder, where we're not currently paying cash taxes, except for just a few dollars inside of foreign countries that we operate in I mean, you last perspective, it'll be a few years, so actually paying cash taxes. So that's really it comes down to that one item that kind of gets.

The call that funny there.

Great. Thank it right and then Dean Here's my bigger picture question.

Been asking a lot of other Ceos I'd love to hear which is and this is for you know not so much advice, you're getting to others and your customers, but just how you're running your business.

When everyone is working from home.

How do you make.

A place where people want to number one stable yet.

Let me do.

Oh I love that question.

I wanted to stay connected to people are we are huge believers and video technology here I, if you're on a meeting other than this meeting right now [laughter] Oh, we believe in connecting all with those that you're close to through video. So we're encouraged that amongst our employees to a great degree we have received.

Still have an all company meeting all company meeting every single Monday.

We still have a once a month onboarding of all new employees that I speak with.

Every single new employee for two hours as they start when the company we of course use enterprise social tools to stay connected.

And our I T team just knocked it out of the park in terms of having the right tools in place.

To keep us all connected.

We try and help our employees stay comfortable you know in their homes as much as possible.

But I would really say, it's creating a.

One of my least favorite terms as socially distance it doesn't have to be that you can be physically distance, but actually creating an environment of social connection is of immense value as you're leaning teams.

Great. Thank you and by the way would be the zoom earnings calls I feel like they gone really well so maybe that yeah, okay. All right here.

Thank you. Our next question comes from Rob Owens with Piper Sandler Your line is no.

Great. Thanks for taking my question Dean you mentioned Onboarding employees, So maybe help us out relative to how Jim reacted relative to that the pandemic in hiring where are you guys are at right now and as you look at adding an incremental capacity given some of the digital transformation that you're seeing can you rank order where your investment is in terms of enterprise.

As versus education versus health care. Thanks.

Sure.

So a couple of questions. There I'll, let me take the second part first and our level of investment and healthcare education and the enterprise.

From a percentage perspective has not changed pre or post cobot, we see opportunity in all three we're innovating in all three and we continue to to invest on both fronts. When it comes to the Onboarding of employees. We initially slowed down as everybody else dead to sort of assess what was happening.

And ladies late March or April.

But I've just as an aside we sent to everybody home on March 12.

Since that time, we have fully remotely onboarded over 70 employees and we brought on over 30 summer interns, we fulfilled our internships to over 30 students. This summer.

And they never came in to work are they were actually very productive all work all summer long I did a terrific job for us and we continue now to accelerate our pace of Onboarding employees.

And because of our technology quite frankly, they all get these a wonderful shrink wrap gifts sent to their homes are and they do exactly what odds instruction set in my prepared comments.

Open box power on and there is no step three and they're connected and able to start doing their job.

Great. Thanks.

Thank you. Our next question comes from Bob I'm, Sorry, with William Blair. Your line is now open.

They are in jail. Thanks, taking my question. Please and then I congrats on purpose in the top lines up with a really strong.

Bottom line result.

Let me touch and from a couple of quick thing one you maybe talk about sort of how you're attacking the Mac opportunity versus the iOS opportunity. That's going to do you think about Mack being really traveling with developers and I'm sort of took and use it but I love it.

With almost everybody sort of how your priorities that back in and how do you think about that and then secondly.

You're talking about ramping somebody investing internationally, you got to embrace opportunities, especially with government now driving for the Japan, Singapore signaling something Germany feed in Switzerland to talk about things like that to sort of as you think about the investments failed because there had your effort internap and stuff that's done but makhaya what's been internationally.

On Feldman or marketing thank you.

Sure. Thank you very much for your question. There's a few things there let me break them apart first of all let me touch on the map versus iOS opportunity. Obviously, there are far more iOS devices out there in the market. Today are then there are map, our we have long been a kind of the standard for.

Securing and managing Max within the enterprise the approach that we take with Mac as simple not only do we want to be the best solution for the Mac, but we want to sell change the experience and differentiate the experience for the Mac within the enterprise that we are also paving the way for greater.

Our map market share growth and we believe that we're doing that and if we believe that we've seen that market share growth over the last several years iOS is a little bit different in that iOS already has the bulk of the market within the enterprise and so one of the things that Jeff can do is provide a great.

It or Apple Eco system experience for both users an ice tea and you see even as Apple announces things like you know applications that will run on iOS and the Mac then.

Necessarily announced that these same applications will run on iOS and say some other manufactured device, which means that you can grow into a scoping and policies for Apple devices that actually encourages the notion of an Apple enterprise management system. So we want to create that Eagle.

System experience for both I T and the user on within the enterprise and then the other thing that we do on the iOS side is industry workflows iOS has the ability to completely transform workflows through mobility, so completely changing the relationship between teacher Institute.

And changing the relationship between physician and patient.

Between corporate and our retail stores that are out there no longer having a cone or where you buy things that but actually make the point of sale at literally the point of sale, so creating the apple ecosystem experience in writing industry workflows is the approach that we take between Mac and iOS.

Regarding internationally our growth outside of the U.S. is faster than it is in the U.S. and generally we invest in sales and marketing off from a growth perspective sort at the same rate that we're growing within those regions. So Ah, we see great opportunity across the world and we will continue to invest in regions.

To capture more of the share that exist a globally.

Okay very helpful guys, that's really really nice jump. Thank you.

Thank you.

I'm not showing any further questions at this time I would not only to turn the call Dakota management for any closing remarks.

Hey, this is our first one everybody I just want to thank you for joining us a jump. We're so excited continue to help organizations succeed with Apple and we look forward to sharing our results more with you in the future have a great afternoon anything.

Okay.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.

[music].

Ladies and gentlemen, thank you for standing by welcome to the jail second quarter 2020 earnings Conference call.

Fine all participants' lines or what's the only.

After the speakers presentation, there will be a question answer session.

Last question during the session you'll need a press star one on your telephone.

Please be advised on todays conference is being recorded.

Have you require any further so let's please press star zero.

Oh, no like to hand, the call rights over to your speaker today the floor. There. Thank you. Please go ahead.

Good afternoon. Thank you for joining us on today's conference call to discuss chance second quarter 2020 financial results with me on today's call again, Hager, Jeff's Chief Executive Officer, and joke Putnam the company's chief financial.

[laughter].

Before we again I would like to remind you that shortly after the market close today, Jim issued a press release now its second quarter 2020 financial itself.

Additionally, Jeff published an Investor presentation, you may access a press release and the presentation on the Investor Relations section jail Dot com.

Today's discussion May include forward looking statements. Please refer to our IPO prospectus dated July 21st 2020, our quarterly report for the quarter ended June Thirtyth 2020 filed on form 10-Q filed with the Securities Exchange Commission, where are you will see a discussion of factors that could cause the company after.

Result to differ materially public statement.

I'd also like to remind you that joined the call. We will discuss some non-GAAP measures related to Jim's performance you can find the reconciliation of those measures to the nearest comparable GAAP measures and our quarterly financial statements to ensure we kind of dropped as many alexs questions as possible. During the call will ask that you. Please limit your questions to one initial question.

And one follow up now I'd like to turn the call over to Dave Hager Danny.

Thank you your line up and thank you everyone for joining us on our first earnings call.

Burst say that it's great to talk to all of you again as a public company.

Jumpstart P.O. was a significant step in our journey to help organizations succeed with Apple and it's a combination of a lot of hard work by many people.

Behalf of our entire management team I want to thank our Jim team members Damn jumped nation for their continued support in achieving this milestone we're very proud of how far we've come since jump was founded in 2002.

Look forward to building on our success in the years ahead.

We like many of you are now in our six month of working remotely and I am so grateful to our team and the outstanding work that they've done executing well be physically isolated from people. They care about amid an uncertain macroeconomic environment caused by cold midnight you.

In addition in light of the tragic event that occurred in our hometown of Minneapolis and the more recent events in our founding state of Wisconsin I also want to thank the jam team for their commitment to be part of the solution as we listen learn and take action against racial biased and Justice and then equity.

Like the rest of the world, we have significant room for improvement and we commit to getting better as we continue to serve our local and global communities.

For our call today, I will recap the highlights of our second quarter and provide a background on job for those who are newer to the company.

Finally, I'll touch on some of the exciting developments in customer wins, we had in the quarter before turning it over to jail, who will walk through the financials in detail. Since this is our first call together and we have many listeners who are just getting to know Jim I plan to spend a bit more time up front and I will on future calls.

We had a very strong performance in Q2 and achieved record quarterly revenue, while significantly improving operating margins total revenue in the second quarter grew 29% year over year to our record $62.2 million driven by recurring revenue growth of 42% year over year two.

$58.8 million, which is now over 94% of total revenues.

Annual recurring revenue or a are as of June thirtyth was $241 million growing 36% year over year.

Non-GAAP operating income was $11.2 million in the quarter or 18% of revenue. This is a nine point improvement over second quarter of 2019.

And Unlevered free cash flow totaled $21 million than the second quarter, representing an unlevered free cash flow margin of 34% compared to 4% in Q2 of last year.

Our strong growth is driven by the essential role we play as the standard an Apple Enterprise management.

I think communicating the value of what we do a jan can be done by telling a short story about my first day of work a jet which was over five years ago and I apologize for those of you who I've heard the story already I tell it because I believe it's a quick and effective way of conveying the power and value of the jump platform.

On my first stab Jim I was prepared to sit down with our IP Department to configure my computer to the exact security requirements that I needed.

For me passwords and provisioning a host of applications.

That was exactly the experience I had it all my previous employers instead I phone a map book with a post at note stuck to the outside of US yellow box. It said step one open box step to power on step three there is no step three no. One was needed to help me set up my computer yet it was cut.

Jammed embraces Apple technology because of its legendary simplicity for the individual as Apple focuses on the person Jim focuses on the people. Our goal is to empower people with Apple technology into make every enterprise experience as simple as seamless as apples consumer experience whether the.

Devices are being used in an office hospital retail store or school.

We filled the gap between what Apple built the person and what the enterprise requires.

Jess platform helps transformed the relationship between I T and the people they serve empowering I T to empower their customers efficiently.

Our purpose built endpoint protection product jump for TEP provides insight regarding how the Apple devices behaving the processes that are running and actively identifies any blocks known malware and behaviors that should be flag as a potential issue or risk for the device user or enterprise.

To manage the Apple ecosystem of devices applications and cloud services, we offer three purpose built products, Jim Pearl Jam School and Jeff now.

These solutions are designed for specific market segments able to address the most complex Apple deployments in the world deliver instant on demand simplicity for small businesses and on teachers with the tools they need to bulk of students and optimize technology used in and out of the classroom.

And with nearly a decade of same day support for apples operating system releases, James individual products together offering integrated platform for full lifecycle Apple Enterprise management.

In addition to the value of the jump platform our user community jump nation has over 100000 members and is one of the tightest online communities in all of high Tech.

They are committed to helping one another solve problems and share best practices and this rich user generated content gets picked up by search engines and helps more people get introduced to jump when they searched for anything regarding apple in the enterprise.

Our annual jump nation user conference or Jane will be virtual this year and is being held September 29 to October 1st we're anticipating our largest turnout ever with thousands of attendees from around the world. We invite all of you to join and watch our keynote presentation on September 29.

And also presentation for many of our customers partners and Jim Teague throughout the remainder of the event.

As in the past attendees can also expect sessions and commentary directly from Apple.

Jeff's dedication to innovation and customer success has fueled our growth to where we now serve over 40000 active customers of all sizes in industries in over 100 countries.

We are broadly distributed with no end customer comprising over 1% of annual revenue and we believe that diversification helps stabilize our business overtime.

Jeff has had a long history of helping organizations through strategic transformations never has our support been more important in the past several months.

James capabilities have put us in the unique position to help our customers with their digital transformation in response to covert 19.

Well, we have seen the same market an organization challenges as everyone else.

Been rewarding also provide solutions that are uniquely valuable in this difficult market.

For years Jam has been building a framework for completely touchless deployment and support.

Now suddenly it's required for everyone.

We've been able to hospitals to deliver care, while preserving PPD and keeping their care provider safe and weve help patients can that but their families. While in isolation using our patent pending virtual visits workflow.

Technology is no longer part of the employee experience. It is the entire employee experience what was once nice to have is now a necessity.

Even after we work through this difficult period, we do not believe the world will go back to the way things, where these past several months have laid the groundwork for future where people can walk from anywhere learn anywhere and receipt care anywhere.

To be clear Jampacked seeding the same macroeconomic market challenges as other organizations, we have seen customers reduce their staff and therefore lower their device counts that renewal some customers have requested to delay payments and we've seen many budget cuts and deferrals, yet janse ability to help organizations across.

The world implement worked at home Tele health and distance learning workflows has in large part offset many of the macroeconomic challenges. Let me give you a few examples.

First in health care industry that is on the top of everyone's mind.

One of the hospitals, we serve is Oxford Health NHS Foundation Trust.

We have worked with Oxford health since 2018, when we were brought in to help streamline their clinical communications efforts with more than 4000 ipads.

In Q2 of this year the cobot 19 outbreak accelerated their digital strategy, Oxford held added jams virtual visit solution to seamlessly configure and deploy Microsoft teams to eyepatch without requiring complex steps for users to get set up or connect virtually.

Oxford Health now simply connects patients in isolation with their loved ones without having to touched the device or provide assistance.

You see San Diego Health is another example of digital care acceleration for several years Jam has helped power you csds patient bedside in clinical communication initiatives using I pads an iPhone.

In Q2, you CSD started using Janssen virtual visit solutions to empower care providers to simply inefficiently visit patients throughout the hospital using zoo to over 700 bed side, I pads, providing critical patient care, while keeping care providers safe and conserving PPD.

In the education industry Cobot 19 resulted in students around the world to be sent home.

Some schools, who are more digitally advance wearables continue classes.

Others were not.

Fortunately governments around the world have created programs to help fund. These initiatives for example in Japan, we saw several new schools come to Jim using funding from the Giga program, which is an abbreviation for global and innovation Gateway for all our program intended to provide high capacity communication that.

Schools in Pcs or tablets to all elementary and secondary students in Japan by 2023.

In Q2, we also saw an acceleration of similar activity in Germany as a result of the did Japan project.

And here in the U.S. the cares App is providing schools with an avenue to fund the digital initiatives required for distance learning.

One example is Austin Independent School District in Texas, where they purchased 24000 seats of jam to help prepare for the upcoming school year.

To safely distribute and personalized these devices for student Austin created a world low using chat to automatically configure devices by simply scanning a QR code for the next student to mine.

In preparation for the upcoming year Saint Paul was able to purchase additional devices now with 45000, ipads and 14000, Matt.

For students that don't have home kind of activity Saint Paul purchase T mobile hotspot and using Jim configured the students devices to automatically use the appropriate hotspot, while blocking anyone else from easier.

They also use GM to configure Google meat.

Person virtual classes and provide a St Paul's public schools specific app store with over 500 educational apps available to students.

In addition to helping hospitals and schools in Q2 Jam also helped businesses stay in business in the UK stalling bank credit Jim for enabling them to pivot entirely to remote work.

When forced to send employs home stalling bank was able to immediately spend 250 brand new map books out to employees homes in one day with another 150 math books in the days that follow.

This was achieved using zero touched the plant that was completely personalized with Jan and secure multifactor authentication accessing enterprise resources enabled by Jam connect.

Not only were employs provided this technology in their homes. The team was able to orchestrate the deployment entirely from their own homes and provide outstanding service with no need to go into the office.

Scribe E signature business out of the Nordics and jam customers since 2018 expanded their champ usage purchasing our latest product Jan protect to ensure their Matt fleet was secure and save as employees accessed company resources remotely.

Scribe needed a Max specific security solution with malware prevention and a design that eliminated colonel extensions and provided seamless integration with genpro to offer immediate remediation of identified issues.

And we're very proud to have taken remote empowerment to a different stratosphere by once again entering space in Q2.

Many of you saw Spacex make history by launching NASA astronauts to the international space station and then returning them to Earth safely using Apple I pads for the crew and ground support staff, Jeff is proud to be space at CES partner for managing thousands of Apple devices.

These customer examples are representative of an addressable market for Apple Enterprise management.

The global total addressable market or Tam for Apple Enterprise management is estimated to be $10.3 billion in 2019 and is expected to grow at a compound annual growth rate, a 17.8% to $23.4 billion by the end of 2024, According to Prost inside.

Evan.

Mark that has been growing consistently over the last decade for a few reasons one because of the consumerization of IP, which refers to the migration of software and hardware products. Originally designed for personal use into the enterprise.

Today employees are less inclined to draw a line between work and personal technology and commonly prefer not to settle for enterprise solutions that are harder to use and what they have in their homes.

This is a trend that is see even more traction due to the digital transformation happening in response to covert 90.

To Apple continues to innovate new technology that increases in penetration within the enterprise, including I phone I pad, Apple TV and Mac, specifically, we see enterprise market share from Matt continuing to expand which we believe is still in the early stages, Jeff will help facilitate that.

Spansion and benefit from it.

Jeff has been pursuing our mission to help organizations succeed with Apple for over 18 years, Yes. We believe we are still early in our story and our market opportunity.

Ample continued to extend our technology leadership position through R&D investment and new products that deliver unique industry specific innovation, we will invest in targeted sales and marketing to grow our customer base and increased sales to existing customers. We also have an opportunity to grow by further expanding our global presence.

And finally, we will continue to cultivate Jeff nation and relationships with developer partners to further build out the jam marketplace in order to provide customers and ecosystem of solutions that help them succeed.

In summary, we are pleased with our Q2 results in a very difficult environment. We continue to see strong demand across the business. We are in the early innings of a significant market opportunity. We appreciate your interest in the Jam story I'd like to now turn the call over to Jill to walk through.

Financial results and guidance.

Ill.

Thanks, Steve and thanks, again to everyone joining us today.

I'll start by providing a brief overview of our financial model and then I'll go through our second quarter results in detail before moving on to guidance for the third quarter and full year 2020.

Our software platform adopted primarily through subscription SaaS model.

This this correction I typically in one year into rights and Blake in advance.

We often tiered pricing based on a number of devices that are solutions are deployed on across the organization.

We see multiple levers that drive our land and expand model, including new logo acquisition.

Increasing number of users across the organization.

Adding more devices to the platform.

Expanding our product suite, the introduction of value added products.

We have primarily in recurring revenue model with recurring revenue expanding as a percentage of our total revenue.

No question about revenue nonrecurring and this includes on premise perpetual license revenue as well its services revenue.

The primary goal of our services offering it to ensure our customers are successful what that Jeff deployments.

So quit configuration support and training services, which are priced on a fixed fee basis.

Well service revenue may fluctuate quarter to quarter.

We expect services today smaller portion of our revenue over time.

We expect perpetual license ethnicity client, an absolute basis as more customers deploy our software that model.

As Jim mentioned, we had a very strong second quarter.

Total revenue for the second quarter $62.2 million growing 29% year over year.

Recurring revenue totaled $58.7 million and the second quarter, an increase of 42% year over year and comprised 94% of our total revenue.

85% since second quarter last year.

Nonrecurring revenue was $3.5 million.

We had a strong finish this june in terms of both Miller pounds anything else.

Moving on today are.

As a reminder, hey are our represent annualized value of all subscription support and maintenance contract.

Ended the period.

Hey are mitigating fluctuations.

Validate contract terms and the sales mix a subscription so time based licenses and staff.

Total a are as of June Thirtyth toy 2200, 41 million dollar.

Chris to 36% year over year.

Three primary drivers underpinning the growth of our air are.

First being a consistently high device expansion needs.

Second I started new logo acquisition.

And third the Upselling and cross selling opportunities for products into our installed base.

We expect to continue benefiting from these trends in the years ahead.

We believe our ability to grow the number devices on our soccer platform provides the key indicator of because of our business and our future business that the Kennedy.

The defined device at the end of any particular period, that's having at least one active subscription support and maintenance agreement as of the measurement date or that hasn't been low probability of renewal.

It's a little customer has multiple chance products and I think I'll divide, but we still that only count that as one tonight.

As of the end of Q2 with 17.2 million devices on our platform, representing an 18% year over year growth rate.

The stuff particular strength in healthcare and education vertical this quarter as cobot 19 has accelerated the demand for organization to connect remotely manage and protect the Apple devices.

We have a history of attracting new customers and growing our annual spend with us overtime.

Driving our high dollar base that retention me.

We accomplished this the adding device to a platform and expanding our customer adoption of add on products.

Our dollar this net retention rate was 117% for the trailing 12 month ended June 30 2020.

Before turning to expense items and profitability I would like to point out that I'll be discussing non-GAAP results for the remainder of my remarks.

Our GAAP financial results, along with a reconciliation between GAAP and non-GAAP I've found in our earnings release.

Gross profit was $51.3 million up 37% year over year, well gross margin with 82% up five point year over year.

The second quarter gross margin was better than our recent historical rate between mix shift in revenue and cost of sales as we delivered left a lot lower margins based services digi cold like restriction.

We expect gross margin to increase overtime as compared to the rate to deliver prior to the impact of coal that.

Recurring revenue becomes a larger portion of total revenue.

The increased average a our our per device.

Turning now its operating expenses.

We remain focused on improving the leverage in our business, while balancing investments for growth.

But this thing and live in mind.

That's our recurring subscription revenue to grow at a faster rate than our operating expenses.

So continue to improve operating margins over time.

Total operating expense for Q2 was $40.1 million compared to $33 million kit to last year.

This year over year growth was driven primarily by continued investment in our global go to market strategy. That's all investments in research and development as innovation in both our existing and new products and features remains a top priority for us.

We also invested capability anticipation of operating at a public company.

The delayed so planned spending in Q2, Dataquick 19, and we'll invest a portion of that expense saving the second half of this year, what the majority of the investment spending in the fourth quarter.

Our operating income in the quarter of 11.2 million dollar and $4.4 million book since you last year.

Non-GAAP operating margin was 18% representing a nine point increase compared to the same period last year.

Partially due to the delayed spending in the quarter.

Our basic and diluted average share count for the quarter was 102.9 million compared to 102.7 million in a second quarter of 2019.

Please note the second quarter share count is not pro forma so the July IPO newly issued shares.

Unlevered free cash flow $21 million in Q2 compared to $1.8 million last year.

Second quarter Unlevered cash flow represents 34% of total revenue.

4% of total revenue a year ago.

Our operating model well have high growth and improving efficiency strong cash flow generation.

In addition in the second quarter, our cash flow benefited from our actual to preserve our cash balance which included a reduction in spending as they evaluated the impact of cobot 19, and our business.

We expect that these investments will return second part of this year.

Turning to the balance sheet. We ended the second quarter was $38.4 million in cash cash equivalents and short term investments.

Following the close of our IPO on July 24, we added approximately $319 million cash.

On July 27, we paid down the principal amount of our term loan facility and related interest in penalties of approximately $210 million.

And finally, turning now to guidance.

As being discussed a business income benefits from a number of trends emerging during this challenging time.

Including the proliferation of Tele health remote learning and the rise a little more permanent work from home movement.

At the same time, there is embedded uncertainty around the I keep spending environment as we know.

Capital spending and new I T project are subject to more scrutiny across organizations everywhere.

But these dynamics in mind for the third quarter of 2020, we expect total revenue in the range of 65 million to $66 million representing growth of 19% to 21% year over year.

Non-GAAP operating income in the range of $597 million.

Any nonrecurring charge of $5.2 million related to the early extinguishment of our term loan facility.

For the full year 2020, we expect total revenue in the range at 255 million to $257 million.

Representing growth of 25% to 26% year over year.

Non-GAAP operating income in the range of 20 million to $23 million, reflecting partially nonrecurring increased operating expenses as they plan to spend a portion of the <unk> expenses related to the second half of the air.

For modeling purposes, we are providing the following information.

We expect an annual effective tax rate of 25%.

As a reminder, we use our statutory tax rate when calculating tax effects of non-GAAP adjustment, but did not materially different from our annual effective tax rate.

The calculating GAAP EPS.

That basic weighted average shares outstanding to be approximately 113 million to the third quarter 116 million for the fourth quarter.

109, nine fiscal year 2020.

We're not providing a diluted weighted average outstanding share count at this time as it would not have a material impact on EPS.

In closing.

I'm very pleased with our performance in the second quarter and look forward to sharing that result in the quarters ahead.

With that didn't I will take a questions operator.

As a reminder to ask a question you will need a press star one on your telephone to.

To withdraw your question press the pound key.

In the interest of time, yes lets you please limit yourself to one question.

Please standby, while we compile the culinary roster.

Our first question comes from Rod Hall with Goldman Sachs. Your line is now open.

Yeah. Thanks for the question and congrats on your for set of earnings as a public company. So I wanted to start off maybe and now Dean Angeliki you guys want to comment on the trajectory of demand. So we've clearly seen the flurry of activity as everybody go into work from.

Holeman study from home here and I Wonder how you see the pipeline of opportunities extending on out. The next couple of quarters, and just kind of help us with the ebb and flow of demand that as that process unfold. There continues to unfold and then the other thing I thought that since the first time you guys have reported earnings due in May.

Maybe I could get you to talk a little bit about.

What your relationship with Apple is.

No that they recently bought that somebody fleet summit, which that bureaucrats provisioning, but just how you see their intentions in enterprise Mac management moving forward Bert the five year old maybe you could give a little history on how that's going to thing.

Sure Hey, good to hear from your Rod there was a lot there honored I just speak first about the trajectory of demand a great data points to look at that would simply be our pipeline and when we take a look at our pipeline and our coverage that we have it is actually very similar post the Cobra.

Got it as it was our prior to it if there's any difference in behavior. Our post covert breakout is that we do see some deals in the pipeline are pushing or taking longer to close but to a counter that we also see very fast moving deals coming into the pipe.

Our school needs to very rapidly get distance learning in place or a of work place like those that I mentioned in my prepared comments on needs to very quickly arm employees at home, so amazingly, they've actually kinda offset each other and our overall pipeline coverage remains about the same.

As it was a prior to the call they don't break.

In relation to Apple or we obviously over the last 18 years, we've had a long our relationship with them. All we have certain contractual element with Apple and that Apple is a reseller of ours through their retail stores going through their education channel I. In addition, apple as a customer of ours in house bench.

Since 2010.

Generally speaking Apple create an April meant services that janssen sample to leverage in order to build solutions. So for instance.

Allergy that Apple bills and build upon it for a more robust Apple enterprise management system that then can be fully deployed whether it be in schools hospitals, where the workplace.

And then finally regarding the fleet Smith acquisition itself are both pre and post acquisition there from Apple, there's such little of functional overlap in market overlap that weve never really consider that a competitive thing. We think apples intent is to continue to build out on the great Apple business manager system that they.

Yeah, and then more they do the stronger we can create our solutions and it'll be just be good for our customers.

Great. Okay, I think baked in I appreciate it.

Thank you. Our next question comes from Sterling Auty with JP Morgan. Your line is now open.

Yes, Thanks, Hi, guys I guess for my question I wanted to dive into the education sector in particular can.

Can you give us a sense of what is the typical buying season in the education vertical do you think you've seen all of the tailwind from co bid in your June results or does the carry into September and how much of that gets split between you know.

Higher education colleges versus K through 12.

Hey, Thanks, Sterling, it's a very interesting season for education right now.

The U.S. the fiscal year runs from July through June. So you end up having awesome seasonality in the month of June our spending last year's budgets, but then you also get some seasonality in July because of spending of this year. Its budget that typically goes throughout the summer and preparation for.

The school year here in the U.S. granted some school years run different time friends around the world and Jim serves education customers around the world for you need to be mindful of that as well.

The bulk of the business.

K 12 of our education business about 85% and I would say this year because of coal bed that the buying season for education is even extending closer to the school year and we would it be never even expected to enter into the school year, a little bit and that is.

For a few reasons one is the need to serve those students and two is just the processes for getting budgeting for it I mentioned three different governments and sources of budgeting.

Mature or budgeting in my comments.

So sometimes that just takes a little bit of time and fill school are going through that process to get budgeting in place in order to do their purchases to be ready for the school year. So it's a little bit heightened this year compared to most years I believe.

Got it thank you.

Yeah.

Thank you. Our next question comes from Brad Sills with Bank of America Securities. Your line is now open.

Great. Thanks, guys I wanted to ask about.

Where youre seeing some of the ER.

Half reductions and device reductions is that limited to hard hit industries. It just any color on where you're seeing that exactly.

Please.

Sure thing Brad Yeah, I mean, obviously in some of the industries that like hospitality, they're going to be the hardest hit and call that one of the things that is our to jams advantage is when you look at our lead industries of education healthcare.

<unk> services at banking.

Some of those industries, our lesser hit them some of the others and as a result, we've been isolated a bit and in fact in some of those industries actually seen increased activity because of the need to respond to covert in a way that keeps care provider save a lot of teachers to still control their classroom and empower.

This workers at home.

Great. Thanks, and you made some comments earlier than on a stronger June.

Should we take that to mean that you know the in the environment is kind of improve throughout the quarter and any July in any update for July and August I think would be really helpful. As well please.

Sure and just to recap a little bit of what we saw in Q2, you know there was definitely a slow down when we took a look at April and I think almost everybody experience that.

As people were just assessing to see what was going to happen. We then saw improvements in May and then from a volume perspective June felt pretty normal to us.

Might've been a little bit different in terms of fast insulin, we'd make deals but from a subscription volumes. It started to feel pretty normal trust and that has continued as weve entered into the summer as well the only thing that has stayed.

As a bit of a challenge would be some of those face to face professional services that is still slower than what we typically see.

Thanks, so much teams.

Sure.

Thank you. Our next question comes from Raimo Lenschow with Barclays. Your line is note.

Hey, Thanks, I have one question on one follow up if that's okay.

First one if you for them and congrats on the first quarter actually then let me start would that.

The.

If you look at the changes that we're seeing now in terms of the industry coming from coal, which there is obviously like headwinds and Tailwinds that drew I see but how do you think this will impact the whole industry and in terms of how that will play out for your business over the coming quarters, because at this and obviously that emergency spending this quarter.

Im always emerged system, but can you talk a little bit about the the underlying changes you're expecting.

40 industry.

That's one and then one.

The follow up is more like a number crunching one like if I think about defy is close to 19%.

Is that kind of a new normal it was slightly lower than in other quarters can you just kind of comment about some of the puts and takes Jeff. Thank you.

Sure. Thanks, Raimo why don't I take the first side of that on the headwinds and Tailwinds from NGL can comment on the device growth.

First of all of headwinds I'll start on the negative we've clearly seen some budget push out we've see some staff reductions.

As a result from device reductions at renewal and we have also seen some customers of requesting to pay I have deferred payments up but offsetting those macroeconomic headwinds we are seeing the overall trends of industries as tailwinds and I've.

I've already covered them work from home Tele health and distance learning and those are only distance learning really has an additional source of funding from the government programs.

Other organizations are coming up at the budgeting that they need in order to do what they must stay in business share for their patients make sure that their students are still in a quality class.

We believe that you know you can't put the Genie back in the bottle when it comes to those trends.

Everything that we see surveys we've conducted analysts that we've talked to say that the work from home at this is actually in igniting event that is going to cause more employees to work from home in the future and if you think that most of our momentum in the industry has been the result of the Consumerization of I'd when you.

I have the group the greatest movement of people from the office to their homes in the history of the world.

I believe that that will fuel the consumerization of IP and I think that schools will now start to embrace distance learning for thing you know in Minnesota, we have things called snow days.

In the future, we may not half nowadays anymore, because we're just it learning enabled and we see hospitals are actually seeing these virtual visits rounds around the hospitals being quite productive efficient and even providing better patient care. So we think those trends are gonna stay even after the.

Macro economic challenges go away and what that went on I handed over to Jim was talking about device go Hey, right now Yeah first device growth about you know a couple of things impacting the most recent quarter a lot of what Daniel talking about what the impact of co vet and particularly in the commercial sector, where we saw our customers being a little bit more deliberate about that.

Number of devices, they're purchasing and renewing really not carrying anything extra then they needed I'm also not renewing early our buying early so that a little bit of an impact. There then the other thing driving it is that we're right in the middle of our summer our education busy season that that's even straddled Q2 in Q3 and those devices and education our device expansion is slower.

Then in the commercial sector and so that.

Without a little bit different in the second quarter by the time, we get to fourth quarter will be back to flipping it around where I work more heavily focused on our commercial business and we'll start to see that flip again.

Thank you congrats.

Thank you. Our next question comes from Matt Hedberg with RBC capital markets. Your line is no.

Great. Thanks for taking my question and congrats guys on on the IPO.

You know Jill or Dean you cross selling it up selling into your base is one of the core drivers of sustained air our growth now I know, both connect and protect our relatively newer products, but they can roughly double the average revenue per per per user can you talk a bit more about what you're seeing today in terms of demand for those to add on.

Jewels, and perhaps how they might ramp in coming quarters in years, especially considering security on Apple devices. Historically has been one of the bigger reasons for not deploying Apple in the enterprise. Thanks guys.

Sure thing Thanks, Matt.

We're very pleased with the demand very pleased with the demand Jim connect has been on the market now less than two years Champ protect has been on the market for less than one year, our customer account for jam protect as measured in hundreds.

Jeff connect is over a thousand we believe that thats been very good adoption in a very short time in market and as time goes on and we continue to integrate our solutions together into offering more of a complete platform than a set of products.

We see that demand even growing further.

You know Apple products are known of for the strength insecurity. However, not many enterprise security providers focus on Apple the way that Jim does and as a result, we believe that not only well the popularity of our security products grow.

But we think it will actually pave the way for mass adoption in the enterprise to grow as well.

Thank you. Our next question comes from Gregg Moskowitz with Mizuho. Your line is now open.

Okay. Thank you very much good afternoon, guys I'll add my congratulations as well I.

I guess my first question, so Apple had a strong quarter as well, including map revenue growth of 22% and just to be clear Dean. Since this question does sometimes come up can you talk about the correlation or lack thereof between apples unit shipments and Youre air our growth.

Yeah actually thanks for that question, Greg it's important to understand that obviously every time Apple grows in their unit shipments jumped certainly doesn't consider that a bad thing.

$3 billion in 2019 and growing at over 17% in the coming five years. According to Frost <unk> Sullivan that growth rate of the town has to do with the enterprise and embracing the Apple products more than it has to do with just unit shipment from applebee's quite frankly, the Apple ecosystem is already.

Very large out there and we have a lot of work to do answer in terms of just continuing to enable those apple devices within enterprise usage.

Okay perfect. Thanks, Dean and then you mentioned that K through 12 is about 85% of your education business.

I was curious into higher Ed side, because you know with an increasing number of college campuses moving to an entirely online curriculum or at the very least one that is primarily on line has this sparked more conversation and potentially even commitments from these colleges to provision there student body with Max that they can control instead of utilizing.

Type approach.

I think that were very early on that discussion and high add right now in fact overall within education.

As much activity is there as they get.

Ready for distance learning I still think that there is a lot of movement to be had remembering were a global company and I mentioned, the Japan Giga project for instance, their plan was to put products.

In the hands of every student in Japan by the year 2023, So there's still quite a long runway there even for our primary and secondary and within high head right now because they generally don't provide those devices for their students on a mass scale, we see a lot of comp.

Our stations on exactly what you were talking about should they sold that you can have the same professor to student relationship that you have within K 12. So we've noticed in the last few years that more high Ed state.

Universities have been providing those devices to students and we actually expect that to grow in the future and I think were actually pretty early on it and high add right now.

Okay very helpful. Thank you.

Thank you.

Our next question comes from David Hynes with Canaccord. Your line is now open.

Hey, Thanks, very much congrats guys on the on the deal on the results.

Do you want to ask with Apple moving to its own silicon for the Mac curious if you see that having any impact on your business good or bad.

Sure and for those that are listening Apple recently announced that they would be moving there.

Matt processors from Intel to Silicon Oh, we think it's awesome, we think it's going to create a more powerful I'm, Matt computer that won't be selected by more people within the workplace, especially as more people from within the workplace go home and.

And you do have that blurred line between what is your personal computing and what is your work computing and certainly would not put up with having a personal computer that is able to do more and be more powerful than your work computers. So we think that Apple silicom will make other Mac, even a better product.

And of course when organizations move our to those Matt you. It isn't an overnight movement. There are going to have a period of time or they're going to have a apple Intel Max within their fleet and Silicom maps within their fleet and we can help them through that transition because nobody has inventory on the Mac as Jeff does.

And we'll be able to make sure that the right policies get applied to the right machines. After all we are really the only ones in the market that we're here to help through the Powerpc to Intel journey that Apple went through a few years ago and were able to use some of those same techniques and our our best in class Apple Enterprise management technology.

To be able to help organization through that so we see it doesn't net positive.

Perfect.

And when a follow up Matt asked about kind of cross sell up sell.

Activity and.

Traction there as you continue to rollout.

No new AD on modules, how high is up for per device sees but before you might start to see some pause from buyers in other words.

Is there a notional ceiling on on what they're willing to pay per device I mean, obviously higher from here, but where do you think that might be.

I'm not going to.

Spit out what the number is in terms of what the maximum I think that people would pay per device be thats.

It gets a little bit funny, but I will tell you the us that more and more if you just look at the total cost of ownership of the Mac within the workplace and for that matter I from an IPO that as well and you start totaling up the cost of all of the software that you end up putting on it the residual value of the machine.

Quality of it.

There've been several studies as you've seen including recently a Forrester total economic impact study that shows that the total cost ownership for the Mac is lower so I believe that theres still more value to provide and provided that we keep our customers total cost of ownership lower than other alternative.

They'll continue to purchase value add products.

That's very helpful. Okay. Thanks, guys congrats.

Thank you.

Our next question comes from Pat Walravens split.

CMP Securities. Your line is now open.

Okay, great. Thank you, let me add my congratulations.

Well, what sort of housekeeping for you and that being a bigger picture lumber gel did.

To help investors out there who aren't necessarily.

100% of beat on the story your EPS came in a little below the consensus but then.

If you look at your guidance and everything else businesses clearly strong was there something that was a bit of the disconnect. There we should call.

Yeah, Hey, Pat good to hear from you and thanks for the questions I really didn't want to try to address the here in front end up so it really comes down to our effective tax rate that was applied and you're really going forward and I encourage everybody to model using our annual effective tax rate, which is 25% and I think some the models are picking up a flat tax rate that got applied so you push that through with that.

Beat on all the other metrics kind of got a few things upside down there, but it really comes down to that and then just as a reminder were not currently paying cash taxes, except for just a few dollars in sort of foreign countries that we operate in I mean, you last perspective, it will be a few years, so actually paying cash taxes. So that's really it comes down to that one item that kind of get things are going to.

That funny there.

Great. Thank you all right and then Dean Here's my bigger picture question.

I've been asking a lot of other Ceos I'd love to hear your thought which is.

This is for.

Not so much advice are getting to others and your customers that just how you're running your business.

When everyone is working from home.

How do you make GM, a place where people want to come but in one state working yet.

Let me do.

Hi, I love that question.

Wanted to stay connected to people are we are huge believers and.

Video technology here I, if you're on a meeting other than this meeting right now.

Oh, we believe in connecting with those that you're close to through video. So we incurred that amongst our employees to a great degree. We have we still have an all company meeting all company meeting every single Monday.

We still have a once a month onboarding of all new employees that I speak with.

Every single new employee for two hours as they start when the company.

We of course use enterprise social tools to stay connected.

And all righty team just knocked it out of the part in terms of having the right tools in place.

To keep us all connected.

We try and help our employees stay comfortable in their homes as much as possible.

But I would really say, it's creating a.

One of my least favorite terms as socially distance.

It doesn't have to be that you're going to be physically distance, but actually creating an environment of social connection is of immense value as you're leaning teams.

Great. Thank you and by the way.

The zoom earnings calls I feel like it's been going really well, so maybe that yeah, great Harry.

Thank you. Our next question comes from Rob Owens with Piper Sandler Your line is no.

Great. Thanks for taking my question, Dan you mentioned on boarding employees. So maybe help us out relative to how jam reacted relative to that the pandemic in hiring where are you guys are at right now and as you look at adding an incremental capacity given some of the digital transformation that you're seeing can you rank order where your investment is in terms of enterprise.

As versus education versus healthcare thanks.

Sure.

So a couple of questions. There I'll, let me take the second part first and our level of investment and healthcare education and the enterprise.

From a percentage perspective has not changed pre or post cobot, we see opportunity in all three we're innovating in all three and we continue to invest on both fronts. When it comes to the Onboarding of employees. We initially slowed down as everybody else dead to sort of assess what was happening.

In late late March or April, but I've, just as an aside we sent to everybody home on March 12.

Since that time, we have fully remotely onboarded over 70 employees and we brought on over 30 summer interns, we fulfilled our internships to over 30 students. This summer.

And they never came and or are they were actually very productive all work all summer long did a terrific job for us and we continue now to accelerate our pace of Onboarding employees.

And because of our technology quite frankly, they all get these are wonderful shrink wrap gifts sent to their homes.

And they do exactly what odds instruction set in my prepared comments.

Open box power on and there is no step three and they are connected and able to start doing their job.

Great. Thanks.

Thank you. Our next question comes from both on sorry, with William Blair. Your line is now open.

A a in jail. Thanks, taking my question is when and how congrats.

On the topline, but they're really strong.

Bottom line result.

I wanted to touch on a couple of quick thing one in maybe talk about how you're attacking Mac opportunity versus the iOS opportunity.

Think about Mack being really.

Birds and.

Use it but I like the government with almost everybody sort of how your priorities that back to those tons and how do you think about that and then secondly.

You're talking about ramping somebody investing internationally, you got great opportunities, especially with government now driving further than Singapore signaling something Germany students, which led to talk about things like that to sort of as you think let me investment sales have your effort international sometimes Dan, but makhaya, what's been international investment.

On Feldman or marketing thank you.

Sure. Thank you very much for your question.

Theres a few things there let me break them apart first of all let me touch on the map versus iOS opportunity. Obviously, there are far more iOS devices out there in the market. Today are then there are map, our we have long been kind of the standard for securing and managing Max within the.

Surprise the approach that we take with Mac as simple not only do we want to be the best solution for the Mac, but we want to sell change the experience and differentiate the experience for the Mac within the enterprise that we are also paving the way for greater map market share growth and we believe that.

We're doing that now we believe that we've seen that market share growth over the last several years iOS is a little bit different in that iOS already has the bulk of the market within the enterprise and so one of the things that Jeff can do is provide a greater apple eco system access.

Periods for both users an ice tea and you see even as Apple announces things like.

Applications that will run on iOS and the Matt.

They don't necessarily at announced that these same applications will run on iOS and say some other manufactured device, which means that you can grow into a scoping and policies for Apple devices that actually encourages the notion of an Apple enterprise management system. So we want to create.

That ecosystem experience for both I T and the user within the enterprise and then the other thing that we do on the iOS side is industry workflows iOS has the ability to completely transform workflows through mobility, so completely changing the relationship between teacher.

In student changing the relationship between physician and patient.

To capture more of the share that exist globally.

Okay very helpful guys veteran further the nice job. Thank you.

Thank you I'm not showing any further questions at this time I would not only to turn the call Dakota management for any closing remarks.

Hi. This is our first one everybody I just want to thank you for joining us a jump. We're so excited continue to help organizations succeed with Apple and we look forward to sharing our results more with you in the future have a great afternoon evening.

Okay.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.

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